Does physicians' compensation affect the probability of their vetoing generic substitution?
AbstractPhysicians' 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-employed 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 explanations are plausible.
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Bibliographic InfoPaper provided by Umeå University, Department of Economics in its series Umeå Economic Studies with number 729.
Length: 23 pages
Date of creation: 01 Feb 2008
Date of revision: 26 Mar 2008
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doctors; salary; fee for service; moral hazard; prescriptions; drugs;
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 - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-02-09 (All new papers)
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