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Physician’s altruism in incentive contracts: Medicare’s quality race

Galina Besstremyannaya and Sergei Golovan ()
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Sergei Golovan: New Economic School, Moscow

No 1903, CINCH Working Paper Series from Universitaet Duisburg-Essen, Competent in Competition and Health

Abstract: The paper analyzes the impact of physicians' altruism and motivation on the outcomes of pay-for-performance schemes in healthcare, where a fixed price contract on quantity is supplemented with a relative performance contract on quality. Our theoretical model forecasts crowding out of most altruistic types. In an empirical application to the Medicare's nationwide natural experiment with a relative performance contract on quality for acute inpatient care since 2013, we observe the proof of this prediction. Namely, the quality dimensions, which are linked to patient's benefit, demonstrate higher deterioration among top-performing hospitals than other incentivized dimensions.

Keywords: incentives contracts; altruism; dynamic panels; healthcare (search for similar items in EconPapers)
JEL-codes: C22 C23 D21 D22 I18 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cta, nep-hrm, nep-ias and nep-ore
Date: 2019-03
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