Health Services as Credence Goods: a Field Experiment

Felix Gottschalk, Wanda Mimra and Christian Waibel
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Wanda Mimra: LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique

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Abstract: Agency problems are a defining characteristic of healthcare markets. We present the results from a field experiment in the market for dental care: a test patient who does not need treatment is sent to 180 dentists to receive treatment recommendations. In the experiment, we vary the socio-economic status of the patient and whether a second opinion signal is sent. Furthermore, measures of market, practice and dentist characteristics are collected. We observe an overtreatment recommendation rate of 28% and a striking heterogeneity in treatment recommendations. Furthermore, we find significantly fewer overtreatment recommendations for patients with higher socio-economic status compared with lower socio-economic status for standard visits, suggesting a complex role for patients' socio-economic status. Competition intensity, measured by dentist density, does not have a significant influence on overtreatment. Dentists with shorter waiting times are more likely to propose unnecessary treatment.

Date: 2020-07-01
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Published in The Economic Journal, 2020, 130 (629), pp.1346-1383. ⟨10.1093/ej/ueaa024⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03137768

DOI: 10.1093/ej/ueaa024

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