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Moonlighting: Public Service and Private Practice

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  • Gary Biglaiser

    ()
    (Department of Economics, University of North Carolina)

  • Ching-to Albert Ma

    ()
    (Department of Economics, Boston University)

Abstract

We study dual job incentives with a focus on public-service physicians referring patients to their private practices. We call this moonlighting. Not all physicians moonlight; we introduce a group of dedicated doctors who in the base models behave sincerely in the public system. Allowing moonlighting always enhances aggregate consumer welfare. The equilibrium care quality in the public system may increase or decrease; in the former situation, the policy allowing moonlighting improves each consumer’s expected utility. Unregulated moonlighting may be detrimental to consumer welfare when it leads to adverse behavioral reactions such as moonlighters shirking more in the public system, and dedicated doctors abandoning their sincere behavior. Price regulation in the private market tradeoffs the efficiency gain from moonlighting against the loss due to adverse behavior in the public system and improve consumer welfare.

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Bibliographic Info

Paper provided by Boston University - Department of Economics in its series Boston University - Department of Economics - Working Papers Series with number WP2006-015.

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Length: 35pages
Date of creation: Mar 2006
Date of revision:
Handle: RePEc:bos:wpaper:wp2006-015

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Cited by:
  1. Galizzi, Matteo M. & Miraldo, Marisa, 2011. "The effects of hospitals' governance on optimal contracts: Bargaining vs. contracting," Journal of Health Economics, Elsevier, vol. 30(2), pages 408-424, March.
  2. Marie Allard & Izabela Jelovac & Pierre-Thomas Léger, 2014. "Payment mechanism and GP self-selection: capitation versus fee for service," International Journal of Health Care Finance and Economics, Springer, vol. 14(2), pages 143-160, June.
  3. Tor Iversen & Ching-to Albert Ma, . "Market Conditions and General Practitioners' Referrals," Boston University - Department of Economics - Working Papers Series wp2009-009, Boston University - Department of Economics.
  4. Socha, Karolina, 2010. "Physician dual practice and the public health care provision. Review of the literature," COHERE Working Paper 2010:4, COHERE - Centre of Health Economics Research, University of Southern Denmark.
  5. 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.
  6. Bond, Derek & Harrison, Michael J & Hession, Niall & O’Brien, Edward J., 2006. "Some Empirical Observations on the Forward Exchange Rate Anomaly," Research Technical Papers 3/RT/06, Central Bank of Ireland.
  7. Fahad Khalil & Doyoung Kim & Jacques Lawarrée, 2013. "Contracts Offered by Bureaucrats," CESifo Working Paper Series 4511, CESifo Group Munich.
  8. Juan J. Dolado & Jesús Gonzalo & Laura Mayoral, 2005. "What is what?: A simple time-domain test of long-memory vs. structural breaks," Economics Working Papers 954, Department of Economics and Business, Universitat Pompeu Fabra.
  9. Dolado, Juan J. & Felgueroso, Florentino, 2008. "Occupational Mismatch and Moonlighting among Spanish Physicians: Do Couples Matter?," IZA Discussion Papers 3419, Institute for the Study of Labor (IZA).
  10. Laura Mayoral, 2005. "Is the observed persistence spurious? A test for fractional integration versus short memory and structural breaks," Economics Working Papers 956, Department of Economics and Business, Universitat Pompeu Fabra.
  11. Allard, Marie & Jelovac, Izabela & Léger, Pierre Thomas, 2011. "Treatment and referral decisions under different physician payment mechanisms," Journal of Health Economics, Elsevier, vol. 30(5), pages 880-893.
  12. Katsumi Shimotsu, 2006. "Simple (but effective) tests of long memory versus structural breaks," Working Papers 1101, Queen's University, Department of Economics.
  13. Johar, Meliyanni, 2010. "The effect of a public health card program on the supply of health care," Social Science & Medicine, Elsevier, vol. 70(10), pages 1527-1535, May.
  14. Socha, Karolina Z. & Bech, Mickael, 2011. "Physician dual practice: A review of literature," Health Policy, Elsevier, vol. 102(1), pages 1-7, September.
  15. Socha, Karolina & Bech, Mickael, 2011. "The relationship between dual practice and physicians’ work behaviour in the public hospitals: Results from the Danish survey," COHERE Working Paper 2011:1, COHERE - Centre of Health Economics Research, University of Southern Denmark.

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