Do Treatment Decisions Depend on Physicians' Financial Incentives?

Brekke, Kurt Richard; Holmås, Tor Helge; Monstad, Karin; Straume, Odd Rune

doi:10.2139/ssrn.2647375

Cited by 11 publications

(24 citation statements)

References 20 publications

(17 reference statements)

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“…Brekke et al. () exploit a reform in Norway that led to some physicians being paid a higher fee per patient than others. They find that physicians did not change the total amount of hours supplied but did spend less time with each patient, so they could see more patients over the same period of time, thereby increasing their remuneration within the total hours envelope.…”

Section: Medical Labour Supplymentioning

confidence: 99%

“…32 In support of this, Shearer, Somé and Fortin (2018) find that when a policy reform in Canada increased the price of all clinical services, physicians supplied less labour. Brekke et al (2017) exploit a reform in Norway that led to some physicians being paid a higher fee per patient than others. They find that physicians did not change the total amount of hours supplied but did spend less time with each patient, so they could see more patients over the same period of time, thereby increasing their remuneration within the total hours envelope.…”

Section: Short-run Wages and Income Elasticities A) Physiciansmentioning

confidence: 99%

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Medical Labour Supply and the Production of Healthcare

2019

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Medical labour markets are important because of their size and the importance of medical labour in the production of healthcare and in subsequent patient outcomes. We present a summary of important trends in the UK medical labour market, and we review the latest research on factors that determine medical labour supply and the impact of labour on patient outcomes. The topics examined include: the responsiveness of labour supply to changes in wages, regulation and other incentives; factors that determine the wide variation in physician practice and style; and the effect of teams and management quality on patient outcomes. This literature reveals that while labour supply is relatively unresponsive to changes in wages, medical personnel do react strongly to other incentives, even in the short run. This is likely to have consequences for the quality of care provided to patients. We set out a series of unanswered questions in the UK setting, including: the importance of non‐financial incentives in recruiting and retaining medical staff; how individuals can be incentivised to work in particular specialties and regions; and how medical teams can be best organised to improve care.

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Section: Medical Labour Supplymentioning

confidence: 99%

Section: Short-run Wages and Income Elasticities A) Physiciansmentioning

confidence: 99%

Medical Labour Supply and the Production of Healthcare

2019

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“…There is a huge literature, spanning several decades, providing solid evidence that physicians tend to respond, in one way or another, to …nancial incentives (e.g., Gaynor and Pauly, 1990;Gaynor and Gertler, 1995;Croxson et al, 2001;Clemens and Gottlieb, 2014;Brekke et al, 2017). A smaller strand of this literature addresses the potential e¤ects of di¤erent types of remuneration schemes on physician behaviour.…”

Section: Literature Reviewmentioning

confidence: 99%

“…We make use of extremely rich and high-quality Norwegian register data, which cover all primary care consultations and all admissions to public somatic hospitals for the period 2009-2013, in order to compare treatment decisions and patient health outcomes under two di¤erent remuneration schemes -…xed salary and fee-for-service -which coexist in the Norwegian primary care market. 1 A key challenge in establishing a causal relationship between remuneration type and GP behaviour is self-selection of physicians into di¤erent remuneration schemes, since GPs'preferences for remuneration type might be systematically correlated with their treatment decisions.…”

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confidence: 99%

How Does The Type of Remuneration Affect Physician Behavior?

Brekke¹,

Holmås²,

Monstad³

et al. 2020

American Journal of Health Economics

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ow w d do oe es s t th he e t ty yp pe e o of f r re em mu un ne er ra at ti io on n a af ff fe ec ct t p ph hy ys si ic ci ia an n b be eh ha av vi io ou ur r? ? F Fi ix xe ed d s sa al la ar ry y v ve er rs su us s f fe ee e--f fo or r--s se er rv vi ic ce e" "K Ku ur rt t R R. . B Br re ek kk ke e T To or r H He el lg ge e H Ho ol lm må ås s K Ka ar ri in n M Mo on ns st ta ad d O Od dd d R Ru un ne e S St tr ra au um me e NIPE WP 09/ 2018 URL: http://www.nipe.eeg.uminho.pt/ «This work was carried out within the funding with COMPETE reference nº POCIAbstractWe analyse the e¤ects of two di¤erent types of physician remuneration -fee-for-service and …xed salary -on the treatment decisions of general practitioners (GPs) and on patients' health outcomes. Using rich Norwegian register data during the period 2009-2013, we focus on GP locums working in a succession of temporary positions, which allows us to observe the same GPs working under di¤erent remuneration schemes within a relatively short period of time. We …nd that GPs respond strongly and consistently to changes in remuneration type.Compared with …xed salary, GP payment by fee-for-service leads to an increase in the supply of consultations and a higher provision of medical services (along several dimensions) per consultation. This has also signi…cant implications for patients'health outcomes. The probability of experiencing an emergency admission to hospital shortly after a GP consultation is close to 20 percent lower if the GP is paid by fee-for-service instead of …xed salary. Overall, our analysis suggests that …xed-salary remuneration leads to underprovision of primary care.

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“…30 Becoming a specialist in general medicine requires at least 4 years of practice and training. For more details, see Brekke et al (2017) who study how GPs respond to financial incentives by exploiting fee changes due to specialist certification. 31 Recall that there is a tight annual expenditure cap (below £200) on out-of-pocket payments, as explained in Section 2.…”

Section: Data Sources and Variablesmentioning

confidence: 99%

Socio‐economic status and physicians' treatment decisions

et al. 2017

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This paper studies the relationship between patients' socio‐economic status and general practitioners' (GPs') service provision by exploiting administrative patient‐level data with information on consultation length, medical tests, and fee payments for each visit in Norway over a 5‐year period (2008–2012). To reduce patient heterogeneity, we limit the sample to a given condition, diabetes type II, that is treated almost exclusively in primary care. We estimate GP fixed‐effect models and control for a wide set of patient characteristics. Our results show that, for each visit, patients with low education get shorter consultations but more medical tests, patients with low income get less of both, and patients with low education/income get less services in monetary terms. We also find that, during a year, patients with low education/income visit the GP more often and receive more services in monetary terms. Thus, GPs treat patients differently according to their socio‐economic status, but we find no support for a social gradient.

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Do Treatment Decisions Depend on Physicians' Financial Incentives?

Cited by 11 publications

References 20 publications

Medical Labour Supply and the Production of Healthcare

Medical Labour Supply and the Production of Healthcare

How Does The Type of Remuneration Affect Physician Behavior?

Socio‐economic status and physicians' treatment decisions

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