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Do Treatment Decisions Depend on Physicians` Financial Incentives?

Author

Listed:
  • Kurt R. Brekke

    () (Department of Economics, Norwegian School of Economics)

  • Tor Helge Holmäs

    () (Uni Rokkan Centre; and Health Economics Bergen)

  • Karin Monstad

    () (Uni Rokkan Centre; and Health Economics Bergen)

  • Odd Rune StraumeAuthor-Email: o.r.straume@eeg.uminho.p

    (Universidade do Minho - NIPE)

Abstract

We study whether and how physicians respond to nancial incentives, making use of detailed register data on the health-care services provided to patients by general practitioners (GPs) in Norway over a six-year period (2006-11). To identify GPs' treatment responses, we exploit that specialisation in general medicine entitles the GPs to a higher consultation fee, implying a change in total and relative fee payments. To control for demand and supply factors related to becoming a specialist, we estimate a GP fixed effect model focusing on a narrow time window around the date of specialist certi cation. Our results show a sharp response by the GPs immediately after obtaining specialist certi fication and thus a higher consultation fee: the number of visits increase, while the treatment intensity (prolonged consultations, lab tests, medical procedures) decline. These fi ndings are consistent with a theory model where (partly) profit motivated GPs face excess demand and income effects are sufficiently small. Finally, we find no evidence for adverse health effects (measured by emergency care centre visits) on patients due to the change in GPs' treatment behaviour after becoming a specialist.

Suggested Citation

  • Kurt R. Brekke & Tor Helge Holmäs & Karin Monstad & Odd Rune StraumeAuthor-Email: o.r.straume@eeg.uminho.p, "undated". "Do Treatment Decisions Depend on Physicians` Financial Incentives?," NIPE Working Papers 7/2015, NIPE - Universidade do Minho.
  • Handle: RePEc:nip:nipewp:7/2015
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    References listed on IDEAS

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    Cited by:

    1. Hafner, Lucas & Reif, Simon & Seebauer, Michael, 2017. "Physician behavior under prospective payment schemes: Evidence from artefactual field and lab experiments," FAU Discussion Papers in Economics 18/2017, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics.

    More about this item

    Keywords

    General Practitioners; Fee-for-service; Profit-motivation Creation-Date: 2015;

    JEL classification:

    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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