Physician performance pay: Experimental evidence
Speaker(s): Daniel Wiesen (Cologne)
Date: Thursday, 21 June 2018
Time: 12:00 - 13:00
Venue: room h12-30
Contact person(s): Raf van Gestel
Abstract
Physician performance pay: Experimental evidence
Jeannette Brosig-Koch, Heike Hennig-Schmidt, Nadja Kairies-Schwarz, Johanna Kokot, Daniel Wiesen
We present causal evidence on the effect of performance pay on medical service provision from an artefactual field experiment with a representative sample of German resident primary care physicians. In the experiment, we introduce performance pay, which is adjusted according to patients' severities of illnesses, to complement capitation. Performance pay is granted if a health care quality threshold is met. In line with standard theory, we find that performance pay significantly reduces underprovision of medical services, and, on average, it increases the patients' health benefit. The magnitude of these effects depends, however, on patients' characteristics. Findings are robust towards variations in levels of performance pay. Beyond standard theory, we find evidence for a crowding-out of altruistic behavior when physicians receive performance pay. Physicians' characteristics such as gender and practice location significantly affect crowding-out of altruistic behavior.