Decision-making in general practice - the effect of financial incentives on the use of laboratory analyses
AbstractThis paper examines the reaction of general practitioners (GPs) to a reform in 2004 in the remuneration system for using laboratory services in general practice. Data from Norway make it possible to distinguish between income motivation and service motivation. The purpose of this paper is to study whether income motivation exists, and if so, the degree of income motivation among general practitioners (GPs) in Norway regarding the use of laboratory services in general practices. We argue that the degree of income motivation among GPs is stronger when the physicians are uncertain about the utility of the laboratory service in question. We have panel data from actual physician-patient encounters in general practices in the years 2001-2004, and use discrete choice analysis and random effects models. Our results indicate that there may be an income motivation among GPs regarding using laboratory services as, after the reform, the GPs chose to use laboratory services less frequently where the fees had been most reduced. In addition, estimation results show that an increase in the fees will lead to a small but significant increase in use. The reform led to minor changes in the use of laboratory analyses in GPs’ offices, and we argue that financial incentives were diluted because they were in conflict with medical recommendations and existing medical practice. The patient’s age has the most influence on GPs’ choice regarding use of laboratory services. The results support the hypothesis that the impact of income increases with increasing uncertainty about diagnosis and treatment. The policy implication of our results is that financial incentives alone are not an effective tool for influencing the use of laboratory services in GPs’ offices.
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Bibliographic InfoPaper provided by Oslo University, Health Economics Research Programme in its series HERO On line Working Paper Series with number 2008:13.
Length: 40 pages
Date of creation: 02 Jun 2009
Date of revision:
Contact details of provider:
Postal: HERO / Institute of Health Management and Health Economics P.O. Box 1089 Blindern, N-0317 Oslo, Norway
Phone: 2307 5309
Fax: 2307 5310
Web page: http://www.hero.uio.no/eng.html
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Financial incentives; laboratory analyses; diagnostic uncertainty; medical practice.;
Find related papers by JEL classification:
- I10 - Health, Education, and Welfare - - Health - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-06-03 (All new papers)
- NEP-DCM-2009-06-03 (Discrete Choice Models)
- NEP-HEA-2009-06-03 (Health Economics)
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