A New Look at Physicians' Responses to Financial Incentives
9. Mai 2023
Neues Arbeitspapier
Authors: Brosig-Koch, J.; Hennig-Schmidt, H.; Kairies-Schwarz, N.; Kokot, J.; Wiesen, D.
Abstract: There is considerable controversy about what causes (in)effectiveness of physician performance pay. Using a behavioral experiment with a representative sample of German primary-care physicians, we study the incentive effect of performance pay on service provision and quality of care. To explain heterogeneity in quality of care, we link administrative data on practice characteristics and survey data on physicians' attitudes with experimental data. We find that under performance pay quality increases by about 7pp compared to baseline capitation. While the effect increases with the severity of illness, the bonus level does not significantly affect the quality of care. Data linkage indicates that primary-care physicians in high-profit practices are most responsive to incentives and provide low quality of care, a relationship which seems to be driven by physicians practicing in suburban areas. Physicians' general altruism and regard for the health benefit of patients are significant drivers of a high quality of care.
Keywords: Pay for performance, behavioral experiment, data linkage, practice characteristics, physician characteristics, attitudes, and motivations