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Should physicians' dual practice be limited? An incentive approach

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Author Info
Paula González (Universidad Pablo de Olavide and CentrA, Sevilla, Spain)

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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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File URL: http://hdl.handle.net/10.1002/hec.890
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Publisher Info
Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 13 (2004)
Issue (Month): 6 ()
Pages: 505-524
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:wly:hlthec:v:13:y:2004:i:6:p:505-524

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Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Ellis, Randall P. & McGuire, Thomas G., 1990. "Optimal payment systems for health services," Journal of Health Economics, Elsevier, vol. 9(4), pages 375-396, December. [Downloadable!] (restricted)
  2. Adrian Towse & Patricia Danzon, 1999. "Medical negligence and the NHS: an economic analysis," Health Economics, John Wiley & Sons, Ltd., vol. 8(2), pages 93-101.
  3. Ellis, Randall P. & McGuire, Thomas G., 1986. "Provider behavior under prospective reimbursement : Cost sharing and supply," Journal of Health Economics, Elsevier, vol. 5(2), pages 129-151, June. [Downloadable!] (restricted)
  4. Rickman, Neil & McGuire, Alistair, 1999. "Regulating Providers' Reimbursement in a Mixed Market for Health Care," Scottish Journal of Political Economy, Scottish Economic Society, vol. 46(1), pages 53-71, February. [Downloadable!] (restricted)
  5. Paula González, 2002. "Policy Implications Of Transferring Patients To Private Practice," Working Papers. Serie AD 2002-12, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
  6. Gaynor, Martin, 1994. "Issues in the Industrial Organization of the Market for Physician Services," Journal of Economics & Management Strategy, Blackwell Publishing, vol. 3(1), pages 211-55, Spring.
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  7. Gal-Or, Esther, 1999. "Optimal Reimbursement and Malpractice Sharing Rules in Health Care Markets," Journal of Regulatory Economics, Springer, vol. 16(3), pages 237-65, November. [Downloadable!] (restricted)
  8. Izabela Jelovac, 2001. "Physicians' payment contracts, treatment decisions and diagnosis accuracy," Health Economics, John Wiley & Sons, Ltd., vol. 10(1), pages 9-25.
  9. Selden, Thomas M., 1990. "A model of capitation," Journal of Health Economics, Elsevier, vol. 9(4), pages 397-409, December. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Paula González, 2006. "The Gatekeeping Role of General Practitioners. Does Patients' Information Matter?," Working Papers 06.09, Universidad Pablo de Olavide, Department of Economics. [Downloadable!]
    Other versions:
  2. Liu, Ting & Sun, Jiayin, 2007. "Informal payments in developing countries' public health sector," MPRA Paper 5279, University Library of Munich, Germany. [Downloadable!]
  3. 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. [Downloadable!]
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