Economic Incentives in Health Care: The Case of Assigning Patients as “Not Ready for Care”

Abstract

We study perverse incentives in health care using the case of waiting lists for non‐emergency procedures. “Not ready for care” (NRFC) status removes patients indefinitely from the lists, and may be misused to improve performance reports. We test whether NRFC rate increases with rewards for good performance. The hospital database is also uniquely linked to a large survey, allowing us to investigate pro‐rich priority in medical treatment, as richer patients are more likely to be paying patients. Overall, we find support for misusage of NRFC status. This result holds regardless of urgency, including to patients with the highest urgency for treatment.