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Physician altruism and moral hazard: (no) evidence from Finnish national prescriptions data

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  • Crea, Giovanni
  • Galizzi, Matteo M.
  • Linnosmaa, Ismo
  • Miraldo, Marisa

Abstract

We test the physicians’ altruism and moral hazard hypotheses using a national panel register containing all 2003-2010 statins prescriptions in Finland. We estimate the likelihood that physicians prescribe generic versus branded versions of statins as a function of the shares of the difference between what patients have to pay out of their pocket and what is covered by the insurance, controlling for patient, physician, and drug characteristics. We find that the estimated coefficients and the average marginal effects associated with moral hazard and altruism are nearly zero, and are orders of magnitude smaller than the ones associated with other explanatory factors such as the prescriptions’ year and the physician specialization. When the analysis distinctly accounts for both the patient and the insurer shares of expenditure, the estimated coefficients directly reject the altruism and moral hazard hypotheses. Instead, we find strong and robust evidence of habits persistence in prescribing branded drugs.

Suggested Citation

  • Crea, Giovanni & Galizzi, Matteo M. & Linnosmaa, Ismo & Miraldo, Marisa, 2019. "Physician altruism and moral hazard: (no) evidence from Finnish national prescriptions data," LSE Research Online Documents on Economics 100301, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:100301
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    Cited by:

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    2. Hernández-Pizarro, Helena M. & Nicodemo, Catia & Casasnovas, Guillem López, 2020. "Discontinuous system of allowances: The response of prosocial health-care professionals," Journal of Public Economics, Elsevier, vol. 190(C).
    3. Rajeev K. Goel, 2021. "Are health care scams infectious? Empirical evidence on contagion in health care fraud," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(1), pages 198-208, January.
    4. Fiorentini, Gianluca & Bruni, Matteo Lippi & Mammi, Irene, 2022. "The same old medicine but cheaper: The impact of patent expiry on physicians’ prescribing behaviour," Journal of Economic Behavior & Organization, Elsevier, vol. 204(C), pages 37-68.
    5. Olivia Bodnar & Hugh Gravelle & Nils Gutacker & Annika Herr, 2024. "Financial incentives and prescribing behavior in primary care," Health Economics, John Wiley & Sons, Ltd., vol. 33(4), pages 696-713, April.
    6. Lagarde, Mylène & Blaauw, Duane, 2022. "Overtreatment and benevolent provider moral hazard: Evidence from South African doctors," Journal of Development Economics, Elsevier, vol. 158(C).
    7. Lagarde, Mylène & Blaauw, Duane, 2022. "Overtreatment and benevolent provider moral hazard: evidence from South African doctors," LSE Research Online Documents on Economics 115383, London School of Economics and Political Science, LSE Library.
    8. Meng‐Chi Tang, 2023. "A structural analysis of physician agency and pharmaceutical demand," Health Economics, John Wiley & Sons, Ltd., vol. 32(7), pages 1453-1477, July.
    9. Rajeev K. Goel, 2020. "Medical professionals and health care fraud: Do they aid or check abuse?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(4), pages 520-528, June.
    10. Attema, Arthur E. & Galizzi, Matteo M. & Groß, Mona & Hennig-Schmidt, Heike & Karay, Yassin & L’Haridon, Olivier & Wiesen, Daniel, 2023. "The formation of physician altruism," Journal of Health Economics, Elsevier, vol. 87(C).

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    More about this item

    Keywords

    pharmaceuticals; moral hazard; physician altruism; habits persistence;
    All these keywords.

    JEL classification:

    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

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