IDEAS home Printed from https://ideas.repec.org/p/hhs/umnees/0729.html
   My bibliography  Save this paper

Does physicians' compensation affect the probability of their vetoing generic substitution?

Author

Listed:
  • Granlund, David

    () (Department of Economics, Umeå University)

Abstract

Physicians' decisions whether or not to veto generic substitution were analyzed using a sample of 350,000 pharmaceutical prescriptions. Point estimates show that - compared to county-employed physicians on salary - physicians working at private practices were 50-80% more likely to veto substitution. The results indicate that this difference is explained by the difference in direct cost associated with substitution, rather than by private physicians' possibly stronger incentives to please their patients. Also, the probability of a veto was found to increase as patients' copayments decreased. This might indicate moral hazard in insurance, though other explanations are plausible.

Suggested Citation

  • Granlund, David, 2008. "Does physicians' compensation affect the probability of their vetoing generic substitution?," Umeå Economic Studies 729, Umeå University, Department of Economics, revised 26 Mar 2008.
  • Handle: RePEc:hhs:umnees:0729
    as

    Download full text from publisher

    File URL: http://www.econ.umu.se/DownloadAsset.action?contentId=48112&languageId=3&assetKey=ues729
    Download Restriction: no

    References listed on IDEAS

    as
    1. William H. Crown & Ernst R. Berndt & Onur Baser & Stan N. Finkelstein & Whitney P. Witt & Jonathan Maguire & Kenan E. Haver, 2004. "Benefit Plan Design and Prescription Drug Utilization Among Asthmatics: Do Patient Copayments Matter?," NBER Chapters,in: Frontiers in Health Policy Research, Volume 7, pages 95-128 National Bureau of Economic Research, Inc.
    2. David Whynes & Darrin Baines & Keith Tolley, 1997. "Prescribing costs in UK general practice: the impact of hard budget constraints," Applied Economics, Taylor & Francis Journals, vol. 29(3), pages 393-399.
    3. Granlund, David & Rudholm, Niklas, 2007. "Consumer Information and Pharmaceutical Prices: Theory and Evidence," HUI Working Papers 8, HUI Research.
    4. David Granlund & Niklas Rudholm & Magnus Wikström, 2006. "Fixed budgets as a cost containment measure for pharmaceuticals," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 7(1), pages 37-45, March.
    5. Blomqvist, Ake, 1991. "The doctor as double agent: Information asymmetry, health insurance, and medical care," Journal of Health Economics, Elsevier, vol. 10(4), pages 411-432.
    6. Leibowitz, Arleen & Manning, Willard G. & Newhouse, Joseph P., 1985. "The demand for prescription drugs as a function of cost-sharing," Social Science & Medicine, Elsevier, vol. 21(10), pages 1063-1069, January.
    7. Dusheiko, Mark & Gravelle, Hugh & Jacobs, Rowena & Smith, Peter, 2006. "The effect of financial incentives on gatekeeping doctors: Evidence from a natural experiment," Journal of Health Economics, Elsevier, vol. 25(3), pages 449-478, May.
    8. Lundin, Douglas, 2000. "Moral hazard in physician prescription behavior," Journal of Health Economics, Elsevier, vol. 19(5), pages 639-662, September.
    9. Granlund, David & Rudholm, Niklas, 2007. "Consumer Information and Pharmaceutical Prices: Theory and Evidence," Umeå Economic Studies 709, Umeå University, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Granlund, David & Rudholm, Niklas, 2008. "Consumer Loyalty in the Swedish Pharmaceuticals Market," HUI Working Papers 17, HUI Research.

    More about this item

    Keywords

    doctors; salary; fee for service; moral hazard; prescriptions; drugs;

    JEL classification:

    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:umnees:0729. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (David Skog). General contact details of provider: http://edirc.repec.org/data/inumuse.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.