Kickbacks, referrals and efficiency in health care markets: Experimental evidence

Christian Waibel and Daniel Wiesen ()

No 2016:8, HERO Online Working Paper Series from University of Oslo, Health Economics Research Programme

Abstract: We analyse the causal effect of kickbacks (referral payments) on general practitioners' behaviours and efficiency. In a stylized model, we derive behavioural predictions for general practitioners' diagnostic efforts and referrals to secondary care (specialized physicians), which we test in a series of controlled laboratory experiments. We exogenously vary the level of regulated referral payments in our experimental treatments. We find that introducing referral payments significantly improves efficiency. An increase in payments leads to less undertreatment of severely ill patients, but also to more unnecessary referrals of mildly ill patients. The net effect is positive, as the former outweighs the latter. Interestingly, the increase in efficiency is mainly driven by behavioural changes of barely altruistic general practitioners.

Keywords: Kickback; referral payment; diagnostic effort; referrals; altruism; efficiency; laboratory experiment (search for similar items in EconPapers)
JEL-codes: C91 D47 I11 (search for similar items in EconPapers)
Pages: 55 pages
Date: 2016-11-04
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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