IDEAS home Printed from https://ideas.repec.org/p/lvl/criacr/1808.html
   My bibliography  Save this paper

Measuring Physicians’ Response to Incentives: Evidence on Hours Worked and Multitasking

Author

Listed:
  • Bruce Shearer
  • Nibene Habib Somé
  • Bernard Fortin

Abstract

We measure the response of physicians to monetary incentives using matched administrative and time-use data on specialists from Québec (Canada). These physicians were paid fee-for-service contracts and supplied a number of different services. Our sample covers a period during which the Québec government changed the prices paid for clinical services. We apply these data to a multitasking model of physician labour supply, measuring two distinct responses. The first is the labour-supply response of physicians to broad-based fee increases. The second is the response to changes in the relative prices of individual services. Our results confirm that physicians respond to incentives in predictable ways. The own-price substitution effects of a relative price change are both economically and statistically significant. Income effects are present, but are overridden when prices are increased for individual services. They are more prominent in the presence of broad-based fee increases. In such cases, the income effect empirically dominates the substitution effet, which leads physicians to reduce their supply of clinical services.

Suggested Citation

  • Bruce Shearer & Nibene Habib Somé & Bernard Fortin, 2018. "Measuring Physicians’ Response to Incentives: Evidence on Hours Worked and Multitasking," Cahiers de recherche 1808, Chaire de recherche Industrielle Alliance sur les enjeux économiques des changements démographiques.
  • Handle: RePEc:lvl:criacr:1808
    as

    Download full text from publisher

    File URL: http://www.cedia.ca/sites/cedia.ca/files/cahier_18_08_measuring_physicians_response_incentives.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Bernard Fortin & Nicolas Jacquemet & Bruce Shearer, 2019. "Labour Supply, Service Intensity and Contract Choice: Theory and Evidence on Physicians," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-02158484, HAL.
    2. Badi H. Baltagi & Espen Bratberg & Tor Helge Holmås, 2005. "A panel data study of physicians' labor supply: the case of Norway," Health Economics, John Wiley & Sons, Ltd., vol. 14(10), pages 1035-1045, October.
    3. Thomas G. McGuire & Mark V. Pauly, 1991. "Physician Response to Fee Changes with Multiple Payers," Papers 0015, Boston University - Industry Studies Programme.
    4. Harry J. Paarsch & Bruce S. Shearer, 1999. "The Response of Worker Effort to Piece Rates: Evidence from the British Columbia Tree-Planting Industry," Journal of Human Resources, University of Wisconsin Press, vol. 34(4), pages 643-667.
    5. Jasmin Kantarevic & Boris Kralj & Darrel Weinkauf, 2008. "Income effects and physician labour supply: evidence from the threshold system in Ontario," Canadian Journal of Economics, Canadian Economics Association, vol. 41(4), pages 1262-1284, November.
    6. McGuire, Thomas G. & Pauly, Mark V., 1991. "Physician response to fee changes with multiple payers," Journal of Health Economics, Elsevier, vol. 10(4), pages 385-410.
    7. Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762, June.
    8. Zabalza, Antoni, 1983. "The CES Utility Function, Non-Linear Budget Constraints and Labour Supply: Results on Female Participation and Hours," Economic Journal, Royal Economic Society, vol. 93(37), pages 312-330, June.
    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. Nibene H. Somé & Rose Anne Devlin & Nirav Mehta & Gregory S. Zaric & Sisira Sarma, 2020. "Stirring the pot: Switching from blended fee‐for‐service to blended capitation models of physician remuneration," Health Economics, John Wiley & Sons, Ltd., vol. 29(11), pages 1435-1455, November.
    2. Somé, N.H. & Devlin, R.A. & Mehta, N. & Zaric, G.S. & Sarma, S., 2020. "Team-based primary care practice and physician's services: Evidence from Family Health Teams in Ontario, Canada," Social Science & Medicine, Elsevier, vol. 264(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bruce Shearer & Nibene Habib Somé & Bernard Fortin, 2018. "Measuring Physicians’ Response to Incentives: Evidence on Hours Worked and Multitasking," Cahiers de recherche 1809, Centre de recherche sur les risques, les enjeux économiques, et les politiques publiques.
    2. Bernard Fortin & Nicolas Jacquemet & Bruce Shearer, 2008. "Policy Analysis in Health-Services Market: Accounting for Quality and Quantity," Annals of Economics and Statistics, GENES, issue 91-92, pages 293-319.
    3. Brekke, Kurt R. & Holmås, Tor Helge & Monstad, Karin & Straume, Odd Rune, 2017. "Do treatment decisions depend on physicians' financial incentives?," Journal of Public Economics, Elsevier, vol. 155(C), pages 74-92.
    4. Kantarevic, Jasmin & Kralj, Boris & Weinkauf, Darrel, 2010. "Enhanced Fee-for-Service Model and Access to Physician Services: Evidence from Family Health Groups in Ontario," IZA Discussion Papers 4862, Institute of Labor Economics (IZA).
    5. Nibene H. Somé & Rose Anne Devlin & Nirav Mehta & Gregory S. Zaric & Sisira Sarma, 2020. "Stirring the pot: Switching from blended fee‐for‐service to blended capitation models of physician remuneration," Health Economics, John Wiley & Sons, Ltd., vol. 29(11), pages 1435-1455, November.
    6. repec:nip:nipewp:07/2015 is not listed on IDEAS
    7. Zhang, Xue & Sweetman, Arthur, 2018. "Blended capitation and incentives: Fee codes inside and outside the capitated basket," Journal of Health Economics, Elsevier, vol. 60(C), pages 16-29.
    8. Currie, Janet & Lin, Wanchuan & Zhang, Wei, 2011. "Patient knowledge and antibiotic abuse: Evidence from an audit study in China," Journal of Health Economics, Elsevier, vol. 30(5), pages 933-949.
    9. Christopher S. Brunt, 2015. "Medicare Part B Intensity and Volume Offset," Health Economics, John Wiley & Sons, Ltd., vol. 24(8), pages 1009-1026, August.
    10. Guccio, C. & Lisi, D., 2014. "Social interactions in inappropriate behavior for childbirth services: Theory and evidence from the Italian hospital sector," Health, Econometrics and Data Group (HEDG) Working Papers 14/28, HEDG, c/o Department of Economics, University of York.
    11. Martin Gaynor, 1994. "Issues in the Industrial Organization of the Market for Physician Services," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 3(1), pages 211-255, March.
    12. Christopher Brunt & Gail Jensen, 2013. "Medicare payment generosity and access to care," Journal of Regulatory Economics, Springer, vol. 44(2), pages 215-236, October.
    13. Parida Wubulihasimu & Werner Brouwer & Pieter van Baal, 2016. "The Impact of Hospital Payment Schemes on Healthcare and Mortality: Evidence from Hospital Payment Reforms in OECD Countries," Health Economics, John Wiley & Sons, Ltd., vol. 25(8), pages 1005-1019, August.
    14. Bradley Chen & Victoria Y. Fan, 2015. "Strategic Provider Behavior Under Global Budget Payment with Price Adjustment in Taiwan," Health Economics, John Wiley & Sons, Ltd., vol. 24(11), pages 1422-1436, November.
    15. Baicker, Katherine & Chernew, Michael E. & Robbins, Jacob A., 2013. "The spillover effects of Medicare managed care: Medicare Advantage and hospital utilization," Journal of Health Economics, Elsevier, vol. 32(6), pages 1289-1300.
    16. Jinhu Li & Jeremiah Hurley & Philip DeCicca & Gioia Buckley, 2014. "Physician Response To Pay‐For‐Performance: Evidence From A Natural Experiment," Health Economics, John Wiley & Sons, Ltd., vol. 23(8), pages 962-978, August.
    17. Nolan Miller & Karen Eggleston & Richard Zeckhauser, 2006. "Provider choice of quality and surplus," International Journal of Health Economics and Management, Springer, vol. 6(2), pages 103-117, June.
    18. Lu, Fangwen, 2014. "Insurance coverage and agency problems in doctor prescriptions: Evidence from a field experiment in China," Journal of Development Economics, Elsevier, vol. 106(C), pages 156-167.
    19. Olsen, Kim Rose & Kristensen, Troels, 2013. "Patient heterogeneity and income under mixed remuneration - empirical explorations of general practice partnerships," DaCHE discussion papers 2013:7, University of Southern Denmark, Dache - Danish Centre for Health Economics.
    20. Rolf Aaberge & Ugo Colombino, 2014. "Labour Supply Models," Contributions to Economic Analysis, in: Cathal O’Donoghue (ed.), Handbook of Microsimulation Modelling, volume 127, pages 167-221, Emerald Publishing Ltd.
    21. Jonathan Gruber & Maria Owings, 1996. "Physician Financial Incentives and Cesarean Section Delivery," RAND Journal of Economics, The RAND Corporation, vol. 27(1), pages 99-123, Spring.

    More about this item

    Keywords

    Physician labour supply; multitasking; incentive pay.;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations

    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:lvl:criacr:1808. 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: (Manuel Paradis). General contact details of provider: http://edirc.repec.org/data/cediaca.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.