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Financial incentives and physician prescription behavior.Evidence from dispensing regulations

Author

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  • Burkhard, D.;
  • Schmid, C.P.R.;
  • Wüthrich, K.;

Abstract

In many healthcare markets, physicians can respond to changes in reimbursement schemes by changing the volume (volume response) and the composition of services provided (substitution response). We examine the relative importance of these two behavioral responses in the context of physician drug dispensing in Switzerland. We find that dispensing increases drug costs by 52% for general practitioners and 56% for specialists. This increase is mainly due to a volume increase. The substitution response is negative on average, but not significantly different from zero for large parts of the distribution. In addition, our results reveal substantial effect heterogeneity.

Suggested Citation

  • Burkhard, D.; & Schmid, C.P.R.; & Wüthrich, K.;, 2018. "Financial incentives and physician prescription behavior.Evidence from dispensing regulations," Health, Econometrics and Data Group (HEDG) Working Papers 18/17, HEDG, c/o Department of Economics, University of York.
  • Handle: RePEc:yor:hectdg:18/17
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    References listed on IDEAS

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    Cited by:

    1. Alexander Ahammer & Ivan Zilic, 2017. "Do Financial Incentives Alter Physician Prescription Behavior? Evidence from Random Patient-GP Allocations," Working Papers 1701, The Institute of Economics, Zagreb.
    2. repec:spr:eujhec:v:18:y:2017:i:9:d:10.1007_s10198-016-0861-7 is not listed on IDEAS

    More about this item

    Keywords

    physician agency; drug expenditures; volume response; substitution response; physician dispensing;

    JEL classification:

    • 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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