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The Role of Physician Altruism in the Physician-Industry Relationship

Author

Listed:
  • Shan Huang
  • Jing Li
  • Anirban Basu

Abstract

Financial incentives can distort physicians' treatment decisions, fueling healthcare spending. Altruism, a core element of medical professionalism, may counteract these distortions. We link altruism elicited from a revealed preference experiment for 267 U.S. physicians to administrative data on industry transfers and prescribing. Non-altruistic physicians receive substantially higher payments (USD 1,775, or 111% more annually) and increase prescribing of promoted drugs after payment, whereas altruistic physicians do not. Divergence is largest in drug classes with high clinical substitutability. Our findings show that altruism moderates the influence of financial incentives in physician-industry ties, limiting the scope for agency problems in prescribing.

Suggested Citation

  • Shan Huang & Jing Li & Anirban Basu, 2025. "The Role of Physician Altruism in the Physician-Industry Relationship," NBER Working Papers 33439, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:33439
    Note: EH
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    Cited by:

    1. Alessandro Fedele & Mirco Tonin & Daniel Wiesen, 2025. "Self-Selection Into Health Professions," CESifo Working Paper Series 11918, CESifo.
    2. Joan Costa-Font & Nicolo Gatti & Gilberto Turati & Daniel Wiesen, 2025. "A prosocial legacy of COVID-19 among healthcare professionals?," DISCE - Working Papers del Dipartimento di Economia e Finanza def145, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).

    More about this item

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality

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