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Sorting into payment schemes and medical treatment: A laboratory experiment

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  • Jeannette Brosig‐Koch
  • Nadja Kairies‐Schwarz
  • Johanna Kokot

Abstract

In this study, we introduce the opportunity for physicians to sort into capitation or fee‐for‐service payment. Using a controlled medically framed laboratory experiment with a sequential within‐subject design allows isolating sorting from incentive effects. We observe a strong preference for fee‐for‐service payment, which does not depend on subjects' prior experience with one of the two payment schemes. Further, we identify a significant sorting effect. Subjects choosing capitation deviate ex ante less from patient‐optimal medical treatment than subjects who sort into fee‐for‐service payment. Particularly the latter become even less patient‐oriented after introducing the choice option. Consequently, the opportunity to choose between fee‐for‐service and capitation payment worsens patient treatment, if at all. Our results hold for medical and for nonmedical students.

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  • Jeannette Brosig‐Koch & Nadja Kairies‐Schwarz & Johanna Kokot, 2017. "Sorting into payment schemes and medical treatment: A laboratory experiment," Health Economics, John Wiley & Sons, Ltd., vol. 26(S3), pages 52-65, December.
    • Handle: RePEc:wly:hlthec:v:26:y:2017:i:s3:p:52-65
    DOI: 10.1002/hec.3616
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    Cited by:

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    2. Balafoutas, Loukas & Fornwagner, Helena & Kerschbamer, Rudolf & Sutter, Matthias & Tverdostup, Maryna, 2020. "Diagnostic Uncertainty and Insurance Coverage in Credence Goods Markets," IZA Discussion Papers 13848, Institute of Labor Economics (IZA).
    3. Werbeck, Anna & Wübker, Ansgar & Ziebarth, Nicolas R., 2021. "Cream skimming by health care providers and inequality in health care access: Evidence from a randomized field experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 1325-1350.
    4. Finocchiaro Castro, Massimo & Guccio, Calogero & Romeo, Domenica, 2022. "A systematic literature review of 10 years of behavioral research on health services," EconStor Preprints 266248, ZBW - Leibniz Information Centre for Economics.
    5. Ge Ge & Geir Godager & Jian Wang, 2022. "Exploring physician agency under demand‐side cost sharing—An experimental approach," Health Economics, John Wiley & Sons, Ltd., vol. 31(6), pages 1202-1227, June.
    6. Nadja Kairies-Schwarz & Claudia Souček, 2020. "Performance Pay in Hospitals: An Experiment on Bonus–Malus Incentives," IJERPH, MDPI, vol. 17(22), pages 1-29, November.
    7. Sylvain Chareyron & Yannick L’Horty & Pascale Petit, 2023. "Cream skimming and discrimination in access to medical care: A field experiment," Health Economics, John Wiley & Sons, Ltd., vol. 32(8), pages 1868-1883, August.
    8. Brosig-Koch, Jeannette & Groß, Mona & Hennig-Schmidt, Heike & Kairies-Schwarz, Nadja & Wiesen, Daniel, 2021. "Physicians' incentives, patients' characteristics, and quality of care: A systematic experimental comparison of fee-for-service, capitation, and pay for performance," Ruhr Economic Papers 923, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    9. Cadena, Brian C. & Smith, Austin C., 2022. "Performance pay, productivity, and strategic opt-out: Evidence from a community health center," Journal of Public Economics, Elsevier, vol. 206(C).
    10. Green, Ellen P. & Kloosterman, Andrew, 2022. "Agent sorting by incentive systems in mission firms: Implications for healthcare and other credence goods markets," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 408-429.

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