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Should physicians' dual practice be limited? An incentive approach

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  • Paula González

Abstract

We develop a principal‐agent model to analyze how the behavior of a physician in the public sector is affected by his activities in the private sector. We show that the physician will have incentives to over‐provide medical services when he uses his public activity as a way of increasing his prestige as a private doctor. The health authority only benefits from the physician's dual practice when it is interested in ensuring a very accurate treatment for the patient. Our analysis provides a theoretical framework in which some actual policies implemented to regulate physicians' dual practice can be addressed. In particular, we focus on the possibility that the health authority offers exclusive contracts to physicians and on the implications of limiting physicians' private earnings. Copyright © 2004 John Wiley & Sons, Ltd.

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  • Paula González, 2004. "Should physicians' dual practice be limited? An incentive approach," Health Economics, John Wiley & Sons, Ltd., vol. 13(6), pages 505-524, June.
    • Handle: RePEc:wly:hlthec:v:13:y:2004:i:6:p:505-524
    DOI: 10.1002/hec.890
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    1. Paula González, 2005. "On a policy of transferring public patients to private practice," Health Economics, John Wiley & Sons, Ltd., vol. 14(5), pages 513-527, May.
    2. Porteiro, Nicolas, 2005. "Regulation of specialized medical care with public and private provision," European Journal of Political Economy, Elsevier, vol. 21(1), pages 221-246, March.
    3. McPake, Barbara & Russo, Giuliano & Tseng, Fu-Min, 2014. "How do dual practitioners divide their time? The cases of three African capital cities," Social Science & Medicine, Elsevier, vol. 122(C), pages 113-121.
    4. Gary Biglaiser & Ching-to Albert Ma, 2007. "Moonlighting: public service and private practice," RAND Journal of Economics, RAND Corporation, vol. 38(4), pages 1113-1133, December.
    5. Katherine Cuff & Jeremiah Hurley & Stuart Mestelman & Andrew Muller & Robert Nuscheler, 2012. "Public and private health‐care financing with alternate public rationing rules," Health Economics, John Wiley & Sons, Ltd., vol. 21(2), pages 83-100, February.
    6. Simona Grassi & Ching-to Albert Ma, 2007. "Subsidy Design and Asymmetric Information: Wealth versus Benefits," Boston University - Department of Economics - Working Papers Series WP2007-033, Boston University - Department of Economics.
    7. González, Paula & Macho-Stadler, Inés, 2013. "A theoretical approach to dual practice regulations in the health sector," Journal of Health Economics, Elsevier, vol. 32(1), pages 66-87.
    8. Xiaoling Bai & Anni Wang & Virginia Plummer & Louisa Lam & Wendy Cross & Ziyao Guan & Xin Hu & Mei Sun & Siyuan Tang, 2019. "Using the theory of planned behaviour to predict nurse's intention to undertake dual practice in China: A multicentre survey," Journal of Clinical Nursing, John Wiley & Sons, vol. 28(11-12), pages 2101-2110, June.
    9. Liu, Ting & Sun, Jiayin, 2007. "Informal payments in developing countries' public health sector," MPRA Paper 5279, University Library of Munich, Germany.
    10. Tor Iversen & Ching-to Ma, 2011. "Market conditions and general practitioners’ referrals," International Journal of Health Economics and Management, Springer, vol. 11(4), pages 245-265, December.
    11. Michael Kuhn & Robert Nuscheler, 2020. "Saving the public from the private? Incentives and outcomes in dual practice," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 22(4), pages 1120-1150, August.
    12. Gaston Brice Nkoumou Ngoa & Roger Tsafack Nanfosso & Benjamin Fomba Kamga, 2021. "Le recours des professionnels de santé à la pluriactivité dans un pays en développement: Le cas des métropoles du Cameroun," African Development Review, African Development Bank, vol. 33(2), pages 249-262, June.
    13. Kurt R. Brekke & Lars Sørgard, 2007. "Public versus private health care in a national health service," Health Economics, John Wiley & Sons, Ltd., vol. 16(6), pages 579-601, June.
    14. Xidong Guo & Sarah Parlane, 2020. "Addressing Private Practice in Public Hospitals," Working Papers 202013, School of Economics, University College Dublin.
    15. Socha, Karolina, 2010. "Physician dual practice and the public health care provision. Review of the literature," DaCHE discussion papers 2010:4, University of Southern Denmark, Dache - Danish Centre for Health Economics.
    16. GONZALEZ, Paula, 2003. "The "gatekeeping" role of general practitioners. Does patients' information matter ?," LIDAM Discussion Papers CORE 2003089, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    17. Siciliani, Luigi, 2006. "Selection of treatment under prospective payment systems in the hospital sector," Journal of Health Economics, Elsevier, vol. 25(3), pages 479-499, May.
    18. Socha, Karolina Z. & Bech, Mickael, 2011. "Physician dual practice: A review of literature," Health Policy, Elsevier, vol. 102(1), pages 1-7, September.

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