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

Giovanni Crea, Matteo M. Galizzi, Ismo Linnosmaa and Marisa Miraldo ()

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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: D64 I11 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2019-05-01
New Economics Papers: this item is included in nep-hea and nep-ias
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Published in Journal of Health Economics, 1, May, 2019, 65, pp. 153-169. ISSN: 0167-6296

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