The Role of Physician Altruism in the Physician-Industry Relationship

Shan Huang, Jing Li and Anirban Basu

No 33439, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Financial incentives can distort physicians' treatment decisions, fueling healthcare spending. Altruism, a core element of medical professionalism, may counteract these distortions. We link altruism elicited from a revealed preference experiment for 267 U.S. physicians to administrative data on industry transfers and prescribing. Non-altruistic physicians receive substantially higher payments (USD 1,775, or 111% more annually) and increase prescribing of promoted drugs after payment, whereas altruistic physicians do not. Divergence is largest in drug classes with high clinical substitutability. Our findings show that altruism moderates the influence of financial incentives in physician-industry ties, limiting the scope for agency problems in prescribing.

JEL-codes: C91 D64 D84 I11 I14 (search for similar items in EconPapers)
Date: 2025-01
New Economics Papers: this item is included in nep-exp, nep-hea and nep-inv
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