How Effective are Pay-for-Performance Incentives for Physicians? – A Laboratory Experiment
Recent reforms in health care have introduced a variety of pay-for-performance programs using financial incentives for physicians to improve the quality of care. Their effectiveness is, however, ambiguous as it is often difficult to disentangle the effect of financial incentives from the ones of various other simultaneous changes in the system. In this study we investigate the effects of introducing financial pay-for-performance incentives with the help of controlled laboratory experiments. In particular, we use fee-for-service and capitation as baseline payment schemes and test how additional pay-for-performance incentives affect the medical treatment of different patient types. Our results reveal that, on average, patients significantly benefit from introducing pay-forperformance, independently of whether it is combined with capitation or fee-for-service incentives. The magnitude of this effect is significantly infl uenced by the patient type, though. These results hold for medical and non-medical students. A cost-benefit analysis further demonstrates that, overall, the increase in patient benefits cannot overcompensate the additional costs associated with pay-for-performance. Moreover, our analysis of individual data reveals different types of responses to pay-for-performance incentives. We find some indication that pay-forperformance might crowd out the intrinsic motivation to care for patients. These insights help to understand the effects caused by introducing pay-for-performance schemes.
|Date of creation:||May 2013|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.rwi-essen.de/
More information through EDIRC
|Order Information:||Web: http://www.rwi-essen.de/publikationen/|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mellström, Carl & Johannesson, Magnus, 2005.
"Crowding Out in Blood Donation: Was Titmuss Right?,"
Working Papers in Economics
180, University of Gothenburg, Department of Economics, revised 08 Feb 2008.
- Carl Mellström & Magnus Johannesson, 2008. "Crowding Out in Blood Donation: Was Titmuss Right?," Journal of the European Economic Association, MIT Press, vol. 6(4), pages 845-863, 06.
- Mark McClellan, 2011. "Reforming Payments to Healthcare Providers: The Key to Slowing Healthcare Cost Growth While Improving Quality?," Journal of Economic Perspectives, American Economic Association, vol. 25(2), pages 69-92, Spring.
- Kathleen J. Mullen & Richard G. Frank & Meredith B. Rosenthal, 2009.
"Can You Get What You Pay For? Pay-For-Performance and the Quality of Healthcare Providers,"
680, RAND Corporation Publications Department.
- Kathleen J. Mullen & Richard G. Frank & Meredith B. Rosenthal, 2010. "Can you get what you pay for? Pay-for-performance and the quality of healthcare providers," RAND Journal of Economics, RAND Corporation, vol. 41(1), pages 64-91.
- Kathleen J. Mullen & Richard G. Frank & Meredith B. Rosenthal, 2009. "Can You Get What You Pay For? Pay-For-Performance and the Quality of Healthcare Providers," NBER Working Papers 14886, National Bureau of Economic Research, Inc.
- Eggleston, Karen, 2005. "Multitasking and mixed systems for provider payment," Journal of Health Economics, Elsevier, vol. 24(1), pages 211-223, January.
- Hugh Gravelle & Matt Sutton & Ada Ma, 2010. "Doctor Behaviour under a Pay for Performance Contract: Treating, Cheating and Case Finding?," Economic Journal, Royal Economic Society, vol. 120(542), pages F129-F156, 02.
- Kaarboe, Oddvar Martin & Siciliani, Luigi, 2008.
"Multitasking, Quality and Pay for Performance,"
CEPR Discussion Papers
6911, C.E.P.R. Discussion Papers.
- Oddvar Martin Kaarboe & Luigi Siciliani, 2008. "Multitasking, quality and pay for performance," Discussion Papers 08/06, Department of Economics, University of York.
- Kaarbøe, Oddvar M. & Siciliani, Luigi, 2011. "Multitasking, Quality and Pay for Performance," Working Papers in Economics 07/08, University of Bergen, Department of Economics.
- Ma, Ching-to Albert, 1994.
"Health Care Payment Systems: Cost and Quality Incentives,"
Journal of Economics & Management Strategy,
Wiley Blackwell, vol. 3(1), pages 93-112, Spring.
- Ching-to Albert Ma, 1994. "Health Care Payment Systems: Cost and Quality Incentives," Papers 0047, Boston University - Industry Studies Programme.
- Susan K. Laury, 2006. "Pay One or Pay All: Random Selection of One Choice for Payment," Experimental Economics Center Working Paper Series 2006-24, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University.
- Gene-Badia, Joan & Escaramis-Babiano, Georgia & Sans-Corrales, Mireia & Sampietro-Colom, Laura & Aguado-Menguy, Francoise & Cabezas-Pena, Carmen & Puelles, Pedro Gallo de, 2007. "Impact of economic incentives on quality of professional life and on end-user satisfaction in primary care," Health Policy, Elsevier, vol. 80(1), pages 2-10, January.
- Frey, Bruno S & Jegen, Reto, 2001. " Motivation Crowding Theory," Journal of Economic Surveys, Wiley Blackwell, vol. 15(5), pages 589-611, December.
- Uri Gneezy & Aldo Rustichini, 2000. "Pay Enough Or Don'T Pay At All," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 791-810, August.
- Guido Baltussen & G. Post & Martijn Assem & Peter Wakker, 2012. "Random incentive systems in a dynamic choice experiment," Experimental Economics, Springer, vol. 15(3), pages 418-443, September.
- Alan Maynard, 2012. "The powers and pitfalls of payment for performance," Health Economics, John Wiley & Sons, Ltd., vol. 21(1), pages 3-12, 01.
- Anthony Scott & Stefanie Schurer & Paul H. Jensen & Peter Sivey, 2009. "The effects of an incentive program on quality of care in diabetes management," Health Economics, John Wiley & Sons, Ltd., vol. 18(9), pages 1091-1108.
- Ellis, Randall P. & McGuire, Thomas G., 1986. "Provider behavior under prospective reimbursement : Cost sharing and supply," Journal of Health Economics, Elsevier, vol. 5(2), pages 129-151, June.
- Robin Cubitt & Chris Starmer & Robert Sugden, 1998. "On the Validity of the Random Lottery Incentive System," Experimental Economics, Springer, vol. 1(2), pages 115-131, September.
- Frey, Bruno S & Oberholzer-Gee, Felix, 1997. "The Cost of Price Incentives: An Empirical Analysis of Motivation Crowding-Out," American Economic Review, American Economic Association, vol. 87(4), pages 746-55, September.
- Eckel, Catherine C. & Grossman, Philip J., 1996. "Altruism in Anonymous Dictator Games," Games and Economic Behavior, Elsevier, vol. 16(2), pages 181-191, October.
- Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
When requesting a correction, please mention this item's handle: RePEc:rwi:repape:0413. 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: (Sabine Weiler)
If references are entirely missing, you can add them using this form.