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Insurance coverage and agency problems in doctor prescriptions: Evidence from a field experiment in China

  • Lu, Fangwen

This study examines doctors' prescribing decisions using controlled hospital visits with randomized patient insurance and doctor incentive status. The results suggest that, when they expect to obtain a proportion of patients' drug expenditures, doctors write 43% more expensive prescriptions to insured patients than to uninsured patients. These differences are largely explained by an agency hypothesis that doctors act out of self-interest by prescribing unnecessary or excessively expensive drugs to insured patients, rather than by a considerate doctor hypothesis that doctors take account of the tradeoff between drug efficacy and patients' ability to pay.

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Article provided by Elsevier in its journal Journal of Development Economics.

Volume (Year): 106 (2014)
Issue (Month): C ()
Pages: 156-167

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Handle: RePEc:eee:deveco:v:106:y:2014:i:c:p:156-167
Contact details of provider: Web page: http://www.elsevier.com/locate/devec

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