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Physicians’ responses to financial and social incentives: A medically framed real effort experiment

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  • Lagarde, Mylène
  • Blaauw, Duane

Abstract

Because compensation policies have critical implications for the provision of health care, and evidence of their effects is limited and difficult to study in the real world, laboratory experiments may be a valuable methodology to study the behavioural responses of health care providers. With this experiment undertaken in 2013, we add to this new literature by designing a new medically framed real effort task to test the effects of different remuneration schemes in a multi-tasking context. We assess the impact of different incentives on the quantity (productivity) and quality of outputs of 132 participants. We also test whether the existence of benefits to patients influences effort. The results show that salary yields the lowest quantity of output, and fee-for-service the highest. By contrast, we find that the highest quality is achieved when participants are paid by salary, followed by capitation. We also find a lot of heterogeneity in behaviour, with intrinsically motivated individuals hardly sensitive to financial incentives. Finally, we find that when work quality benefits patients directly, subjects improve the quality of their output, while maintaining the same levels of productivity. This paper adds to a nascent literature by providing a new approach to studying remuneration schemes and modelling the medical decision making environment in the lab.

Suggested Citation

  • Lagarde, Mylène & Blaauw, Duane, 2017. "Physicians’ responses to financial and social incentives: A medically framed real effort experiment," Social Science & Medicine, Elsevier, vol. 179(C), pages 147-159.
  • Handle: RePEc:eee:socmed:v:179:y:2017:i:c:p:147-159
    DOI: 10.1016/j.socscimed.2017.03.002
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    References listed on IDEAS

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    Cited by:

    1. Hafner, Lucas & Reif, Simon & Seebauer, Michael, 2017. "Physician behavior under prospective payment schemes: Evidence from artefactual field and lab experiments," FAU Discussion Papers in Economics 18/2017, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics.
    2. repec:eee:socmed:v:196:y:2018:i:c:p:227-232 is not listed on IDEAS

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