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Financial incentives and physician prescription behavior.Evidence from dispensing regulations

Burkhard, D.;, Christian Schmid () and Wüthrich, K.;

Health, Econometrics and Data Group (HEDG) Working Papers from HEDG, c/o Department of Economics, University of York

Abstract: In many healthcare markets, physicians can respond to changes in reimbursement schemes by changing the volume (volume response) and the composition of services provided (substitution response). We examine the relative importance of these two behavioral responses in the context of physician drug dispensing in Switzerland. We find that dispensing increases drug costs by 52% for general practitioners and 56% for specialists. This increase is mainly due to a volume increase. The substitution response is negative on average, but not significantly different from zero for large parts of the distribution. In addition, our results reveal substantial effect heterogeneity.

Keywords: physician agency; drug expenditures; volume response; substitution response; physician dispensing (search for similar items in EconPapers)
JEL-codes: I11 I18 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hea
Date: 2018-08
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Working Paper: Financial incentives and physician prescription behavior: Evidence from dispensing regulations (2015) Downloads
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