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The Effect of Financial Incentives on Quality of Care: The Case of Diabetes

  • Anthony Scott

    ()

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

  • Stefanie Schurer

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

  • Paul H. Jensen

    ()

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbournehor-Workplace-Name: Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

  • Peter Sivey

    ()

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

Australia introduced an incentive payment scheme for general practitioners to ensure systematic and high quality care in chronic disease management. There is little empirical evidence and ambiguous theoretical guidance on which effects to expect on the quality of care. This paper evaluates the impact of the payment incentives on quality of care in diabetes, as measured by the probability of ordering an HbA1c test. The empirical analysis is conducted with a unique data set and a multivariate probit model to control for the simultaneous self-selection process of practices into the payment scheme and larger practices. The study finds that the incentive reform had a positive effect on quality of care in diabetes management and that participation in the scheme is facilitated by the support of Divisions of General Practice.

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Paper provided by Melbourne Institute of Applied Economic and Social Research, The University of Melbourne in its series Melbourne Institute Working Paper Series with number wp2008n12.

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Length: 30 pages
Date of creation: Jul 2008
Date of revision:
Handle: RePEc:iae:iaewps:wp2008n12
Contact details of provider: Postal: Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Victoria 3010 Australia
Phone: +61 3 8344 2100
Fax: +61 3 8344 2111
Web page: http://www.melbourneinstitute.com/Email:


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  10. Steven Simoens & Antonio Giuffrida, 2004. "The Impact of Physician Payment Methods on Raising the Efficiency of the Healthcare System: An International Comparison," Applied Health Economics and Health Policy, Springer Healthcare | Adis, vol. 3(1), pages 39-46.
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