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

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

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Granlund, David () (Department of Economics)

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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Paper provided by The Swedish Retail Institute (HUI) in its series HUI Working Papers with number 14.

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Length: 23 pages
Date of creation: 04 Apr 2008
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Handle: RePEc:hhs:huiwps:0014

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Find related papers by JEL classification:
D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Boundaries of Public and Private Enterprise; Privatization; Contracting Out

This paper has been announced in the following NEP Reports:

NEP-ALL-2008-04-15 (All new papers)
NEP-HEA-2008-04-15 (Health Economics)
NEP-LAB-2008-04-15 (Labour Economics)

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.:

Lundin, Douglas, 2000. "Moral hazard in physician prescription behavior," Journal of Health Economics, Elsevier, vol. 19(5), pages 639-662, September. [Downloadable!] (restricted)
David Granlund & Niklas Rudholm & Magnus Wikström, 2006. "Fixed budgets as a cost containment measure for pharmaceuticals," The European Journal of Health Economics, Springer, vol. 7(1), pages 37-45, March. [Downloadable!] (restricted)
Other versions:
- 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. [Downloadable!]
Granlund, David & Rudholm, Niklas, 2007. "Consumer Information and Pharmaceutical Prices: Theory and Evidence," UmeÃ¥ Economic Studies 709, Umeå University, Department of Economics. [Downloadable!]
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. [Downloadable!] (restricted)
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. [Downloadable!] (restricted)
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?," Forum for Health Economics & Policy, Berkeley Electronic Press, vol. 7. [Downloadable!]
William H. Greene, 1992. "A Statistical Model for Credit Scoring," Working Papers 92-29, New York University, Leonard N. Stern School of Business, Department of Economics. [Downloadable!]
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. [Downloadable!] (restricted)
Granlund, David & Rudholm, Niklas, 2007. "Consumer Information and Pharmaceutical Prices: Theory and Evidence," HUI Working Papers 8, The Swedish Retail Institute (HUI). [Downloadable!]
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. [Downloadable!]

Full references

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(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.)

Granlund, David & Rudholm, Niklas, 2008. "Consumer Loyalty in the Swedish Pharmaceuticals Market," HUI Working Papers 17, The Swedish Retail Institute (HUI). [Downloadable!]

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