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Resource scarcity and prioritization decisions in medical care: A lab experiment with heterogeneous patient types

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  • Franziska Brendel
  • Lisa Einhaus
  • Franziska Then

Abstract

During the COVID‐19 pandemic, health care systems around the world have received additional funding, while at other times, financial support has been lowered to consolidate public spending. Such budget changes likely affect provision behavior in health care. We study how different degrees of resource scarcity affect medical service provision and, in consequence, patients' health. In a controlled lab environment, physicians are paid by capitation and allocate limited resources to several patients. This implies a trade‐off between physicians' profits and patients' health benefits. We vary levels of resource scarcity and patient characteristics systematically and observe that most subjects in the role of physician devote a relatively stable share of budget to patient treatment, implying that they provide fewer services when they face more severe budget constraints. Average patient benefits decrease in proportion to physician budgets. The majority of subjects chooses an allocation that leads to equal patient benefits as opposed to allocating resources efficiently.

Suggested Citation

  • Franziska Brendel & Lisa Einhaus & Franziska Then, 2021. "Resource scarcity and prioritization decisions in medical care: A lab experiment with heterogeneous patient types," Health Economics, John Wiley & Sons, Ltd., vol. 30(2), pages 470-477, February.
  • Handle: RePEc:wly:hlthec:v:30:y:2021:i:2:p:470-477
    DOI: 10.1002/hec.4192
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    Blog mentions

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    1. Chris Sampson’s journal round-up for 8th March 2021
      by Chris Sampson in The Academic Health Economists' Blog on 2021-03-08 12:00:01

    RePEc Biblio mentions

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    1. > Economics of Welfare > Health Economics > Economics of Pandemics > Specific pandemics > Covid-19 > Health > Allocation and rationing

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