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Does Physicians' Compensation Affect the Probability of their Vetoing Generic Substitution?

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  • Granlund, David

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    (Department of Economics)

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    Abstract

    Physicians' decisions whether or not to veto generic substitution were analyzed using a sample of 350,000 pharmaceutical prescriptions. Point estimates show that - compared to county-empoyed physicians on salary - physicians working at private practices were 50-80% more likely to veto substitution. The results indicate that this difference is explained by the difference in direct cost associated with substitution, rather than by private physicians' possibly stronger incentives to please their patients. Also, the probability of a veto was found to increase as patients' copayments decreased. This might indicate moral hazard in insurance, though other exaplanations are plausible.

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    Bibliographic Info

    Paper provided by HUI Research in its series HUI Working Papers with number 14.

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    Length: 23 pages
    Date of creation: 04 Apr 2008
    Date of revision:
    Publication status: Published as Granlund, David, 'Are private physicians more likely to veto generic substitution of prescribed pharmaceuticals? ' in Social Science & Medicine, 2009, pages 1643-1650.
    Handle: RePEc:hhs:huiwps:0014

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    Related research

    Keywords: doctors; salary; fee for service; moral hazard; prescriptions; drugs;

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    References

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    1. Granlund, David & Rudholm, Niklas & Wikström, Magnus, 2004. "Fixed Budgets as a Cost Containment Measure for Pharmaceuticals," UmeÃ¥ Economic Studies 639, Umeå University, Department of Economics.
    2. William H. Crown & Ernst R. Berndt & Onur Baser & Stan N. Finkelstein & Whitney P. Witt & Jonathan Maguire & Kenan E. Haver, 2004. "Benefit Plan Design and Prescription Drug Utilization Among Asthmatics: Do Patient Copayments Matter?," NBER Chapters, in: Frontiers in Health Policy Research, Volume 7, pages 95-128 National Bureau of Economic Research, Inc.
    3. Lundin, Douglas, 2000. "Moral hazard in physician prescription behavior," Journal of Health Economics, Elsevier, vol. 19(5), pages 639-662, September.
    4. Granlund, David & Rudholm, Niklas, 2007. "Consumer Information and Pharmaceutical Prices: Theory and Evidence," UmeÃ¥ Economic Studies 709, Umeå University, Department of Economics.
    5. Granlund, David & Rudholm, Niklas, 2007. "Consumer Information and Pharmaceutical Prices: Theory and Evidence," HUI Working Papers 8, HUI Research.
    6. Boyes, William J. & Hoffman, Dennis L. & Low, Stuart A., 1989. "An econometric analysis of the bank credit scoring problem," Journal of Econometrics, Elsevier, vol. 40(1), pages 3-14, January.
    7. Blomqvist, Ake, 1991. "The doctor as double agent: Information asymmetry, health insurance, and medical care," Journal of Health Economics, Elsevier, vol. 10(4), pages 411-432.
    8. Dusheiko, Mark & Gravelle, Hugh & Jacobs, Rowena & Smith, Peter, 2006. "The effect of financial incentives on gatekeeping doctors: Evidence from a natural experiment," Journal of Health Economics, Elsevier, vol. 25(3), pages 449-478, May.
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    Cited by:
    1. Granlund, David & Rudholm, Niklas, 2008. "Consumer Loyalty in the Swedish Pharmaceuticals Market," HUI Working Papers 17, HUI Research.

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