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Physicians’ responses to financial and social incentives: a medically framed real effort experiment

Lagarde, Mylène ORCID: 0000-0002-5713-2659 and Blaauw, Duane (2017) Physicians’ responses to financial and social incentives: a medically framed real effort experiment. Social Science & Medicine, 179. pp. 147-159. ISSN 0277-9536

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Identification Number: 10.1016/j.socscimed.2017.03.002


Because compensation policies have critical implications for the provision of health care, and evidence of their effects is limited and difficult to study in the real world, laboratory experiments may be a valuable methodology to study the behavioural responses of health care providers. With this experiment undertaken in 2013, we add to this new literature by designing a new medically framed real effort task to test the effects of different remuneration schemes in a multi-tasking context. We assess the impact of different incentives on the quantity (productivity) and quality of outputs of 132 participants. We also test whether the existence of benefits to patients influences effort. The results show that salary produces the lowest quantity of output, and fee-for-service the highest productivity. By contrast, we find that the highest quality is achieved when participants are paid by salary, followed by capitation. We also find a lot of heterogeneity in behaviour, with intrinsically motivated individuals hardly sensitive to financial incentives. Finally, we find that when work quality benefits patients directly, subjects improve the quality of their output, while maintaining the same levels of productivity. This paper adds to a nascent literature by providing a new approach to studying remuneration schemes and modelling the medical decision making environment.

Item Type: Article
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Additional Information: © 2017 The Authors © CC BY-NC-ND 4.0
Divisions: LSE Health
Subjects: R Medicine > RA Public aspects of medicine
Date Deposited: 13 Mar 2017 09:56
Last Modified: 19 Jun 2024 22:54
Funders: Department for International Development

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