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Time to revisit the agency theory and expand our thoughts on what motivates physicians? A nudge to health economists

Anne Sophie Oxholm (), Dorte Gyrd-Hansen (), Christian Bøtcher Jacobsen (), Ulrich Thy Jensen () and Line Pedersen ()
Additional contact information
Christian Bøtcher Jacobsen: Department of Political Science, Aarhus University, Postal: Bartholins Allé 7, building 1340, 332,, 8000 Aarhus C, Denmark
Ulrich Thy Jensen: School of Public Affairs, Arizona State University, Postal: DTPHX Campus, , Mailcode 3720

No 2022:1, DaCHE discussion papers from University of Southern Denmark, Dache - Danish Centre for Health Economics

Abstract: Health economists typically use agency theory to predict how physicians respond to various policy schemes. Empirical studies show that many schemes lead to unintended responses, indicating that current theoretical models fail to fully explain physicians’ behaviour. Drawing on key lessons from social psychology and public administration literatures, we propose to expand the principal-agent framework by unfolding physicians’ non-pecuniary motives to provide care using three components: patient benefits, intrinsic motivation, and societal benefits (externalities). We argue how each of these motivational components align with the existing agency framework and provide examples of how to measure the degree to which physicians are motivated by these components. Finally, we discuss how physicians’ non-pecuniary motives can be used to inform policymaking.

Keywords: Health care; agency theory; double agency; altruism; externalities; user orientation; intrinsic motivation; public service motivation; non-financial incentives (search for similar items in EconPapers)
JEL-codes: I10 I11 (search for similar items in EconPapers)
Pages: 7 pages
Date: 2022-01-21
New Economics Papers: this item is included in nep-his
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DOI: 10.21996/me0g-gn43

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Handle: RePEc:hhs:sduhec:2022_001