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Custom-made versus ready-to-wear treatments: Behavioral propensities in physicians' choices

  • Frank, Richard G.
  • Zeckhauser, Richard J.

To customize treatments to individual patients entails costs of coordination and cognition. Thus, providers sometimes choose treatments based on norms for broad classes of patients. We develop behavioral hypotheses explaining when and why doctors customize to the particular patient, and when instead they employ "ready-to-wear" treatments. Our empirical studies examining length of office visits and physician prescribing behavior find evidence of norm-following behavior. Some such behavior, from our studies and from the literature, proves sensible; but other behavior seems far from optimal.

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

Volume (Year): 26 (2007)
Issue (Month): 6 (December)
Pages: 1101-1127

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Handle: RePEc:eee:jhecon:v:26:y:2007:i:6:p:1101-1127
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  1. Sherry Glied & Joshua Zivin, 2000. "How Do Doctors Behave When Some (But Not All) of Their Patients are in Managed Care?," NBER Working Papers 7907, National Bureau of Economic Research, Inc.
  2. Phelps, Charles E., 2000. "Information diffusion and best practice adoption," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 5, pages 223-264 Elsevier.
  3. Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
  4. Amitabh Chandra & Douglas O. Staiger, 2007. "Productivity Spillovers in Health Care: Evidence from the Treatment of Heart Attacks," Journal of Political Economy, University of Chicago Press, vol. 115, pages 103-140.
  5. John Conlisk, 1996. "Why Bounded Rationality?," Journal of Economic Literature, American Economic Association, vol. 34(2), pages 669-700, June.
  6. Becker, G.S. & Murphy, K.M., 1991. "The Division of Labor, Coordination Costs, and Knowledge," University of Chicago - Economics Research Center 92-5, Chicago - Economics Research Center.
  7. repec:tpr:qjecon:v:107:y:1992:i:3:p:797-817 is not listed on IDEAS
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