Physician altruism and moral hazard: (no) Evidence from Finnish national prescriptions data

Giovanni Crea, Matteo Galizzi, Ismo Linnosmaa and Marisa Miraldo

Journal of Health Economics, 2019, vol. 65, issue C, 153-169

Abstract: We test the physicians’ altruism and moral hazard hypotheses using a national panel register containing all 2003–2010 statins prescriptions in Finland. We estimate the likelihood that physicians prescribe generic versus branded versions of statins as a function of the shares of the difference between what patients have to pay out of their pocket and what is covered by the insurance, controlling for patient, physician, and drug characteristics. We find that the estimated coefficients and the average marginal effects associated with moral hazard and altruism are nearly zero, and are orders of magnitude smaller than the ones associated with other explanatory factors such as the prescriptions’ year and the physician specialization. When the analysis distinctly accounts for both the patient and the insurer shares of expenditure, the estimated coefficients directly reject the altruism and moral hazard hypotheses. Instead, we find strong and robust evidence of habits persistence in prescribing branded drugs.

Keywords: Pharmaceuticals; Moral hazard; Physician altruism; Habits persistence (search for similar items in EconPapers)
JEL-codes: C55 D64 I11 I13 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:65:y:2019:i:c:p:153-169

DOI: 10.1016/j.jhealeco.2019.03.006

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