Health Services as Credence Goods: A Field Experiment

Gottschalk, Felix C.H.; Mimra, Wanda; Waibel, Christian

doi:10.2139/ssrn.3036573

Cited by 28 publications

(10 citation statements)

References 46 publications

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“…Aggregated data do not usually reveal whether a single treatment was necessary or not. In this respect, field studies (Currie et al, ; Das et al, ; Gottschalk et al, ) and empirical work using patient‐level microdata in specific settings (Brekke et al, ) are promising. Although such studies are limited to specific settings, they seem to be well‐suited to enhance our understanding of the extent and causes of overtreatment.…”

Section: Resultsmentioning

confidence: 99%

“…In such cases, the treatment recommendation of a physician is a credence good, and patients cannot detect overtreatment. An example is a dental filling (Gottschalk et al, ): even after treatment, patients usually cannot evaluate whether they needed a filling (bad state) or not (good state). In our model, physicians use this informational advantage to overtreat visiting patients who are in the good state.…”

Section: The Credence Goods Market: the Case With Overtreatmentmentioning

confidence: 99%

“…A common problem arising from this situation is overtreatment (sometimes referred to as overprovision), which occurs when physicians provide more treatment than necessary. Recently, field experiments have provided illustrative evidence for the existence of overtreatment in different health‐care markets (Currie, Lin, & Zhang, ; Das, Holla, Mohpal, & Muralidharan, ; Gottschalk, Mimra, & Waibel, ).…”

Section: Introductionmentioning

confidence: 99%

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Why prevent when it does not pay? Prevention when health services are credence goods

Gottschalk

2019

Health Economics

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Summary This article identifies information asymmetries and the corresponding problem of overtreatment as a possible source of prevention and health disparities when patients differ with respect to their health risk. It analyzes preventive health behavior (primary prevention) and preventive health‐care utilization (secondary prevention) in markets in which patients cannot determine whether they receive excessive secondary preventive treatment—that is, where health services are credence goods. The problem of overtreatment in such markets is considered as a possible pathway through which differences in health risk lead to disparities in primary and secondary prevention as well as the corresponding health outcomes. Patients with high health risks do not invest in primary prevention, because they anticipate to be provided with unnecessary secondary prevention. Patients with lower risks invest in primary but not in secondary prevention, resulting in health losses. Furthermore, when societal groups differ with respect to their exposure to overtreatment, and we consider socioeconomic status as a possible reason, we observe disparities in primary and secondary prevention as well as the resulting health outcomes, including the “social gradient.” Several implications for empirical research are discussed.

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Section: Resultsmentioning

confidence: 99%

Section: The Credence Goods Market: the Case With Overtreatmentmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Why prevent when it does not pay? Prevention when health services are credence goods

Gottschalk

2019

Health Economics

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“…Our main results fit consistently into the existing experimental literature on credence goods. The observation that physicians are heterogeneous in their response to overtreatment incentives has also been made in Beck, Kerschbamer, Qiu, and Sutter (2013); Dulleck et al (2011);Gottschalk et al (2017);and Kerschbamer et al (2016), with a particular discussion and estimation of heterogeneity in Kerschbamer et al (2017). Nevertheless, agents respond to incentives.…”

Section: Discussionmentioning

confidence: 99%

“…One set of studies examines physician incentives from different payment schemes (such as fee-for-services and capitation payments) in a noninteractive/nonstrategic context (e.g., Brosig-Koch, Hennig-Schmidt, Kairies-Schwarz, & Wiesen, 2015Godager, Hennig-Schmidt, & Iversen, 2016;Green, 2014;Hennig-Schmidt, Selten, & Wiesen, 2011;Hennig-Schmidt, & Wiesen, 2014). A number of recent field experiments test the susceptivity of credence good providers to overtreating their clients under different information conditions and incentives, for example, Balafoutas, Beck, Kerschbamer, and Sutter (2013) for cab drivers; Kerschbamer, Neururer, and Sutter (2016) for computer experts; Lu (2014) for endocrinology and cardiology specialists; and Gottschalk, Mimra, and Waibel (2017) for dentists. Beck, Kerschbamer, Qiu, and Sutter (2014) invite car mechanics to the laboratory and find them to be more overtreating than students.…”

Section: Introductionmentioning

confidence: 99%

Separation of prescription and treatment in health care markets: A laboratory experiment

2017

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SummaryHealth care is a credence good, and its market is plagued by asymmetric information. In this paper, we use a laboratory experiment to test the performance of a potential remedy discussed in the applied literature, the separation of prescription and treatment activities. We observe a significant amount of overtreatment (and a smaller nonpredicted amount of undertreatment) in our baseline environment. Requiring a different than the treating physician to provide diagnosis and prescription for free is an effective way to reduce overtreatment in our laboratory setting. This effect, however, is partially offset by an increased frequency of undertreatment. Allowing prescription and treatment physicians to independently set prices for their services reduces efficiency due to coordination failures:In sum, prices are often higher than expected benefit of patients, who in turn do not attend to the physician. Also contrary to theory, bargaining power does not play a significant role for the distribution of profits between physicians.

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Implementation of altered provider incentives for a more individual‐risk‐based assignment of dental recall intervals: evidence from a health systems reform in Denmark

et al. 2020

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Equipping health systems with suitable incentives for efficient resource allocation remains a major health policy challenge. This study examines the impacts of 2015 regulatory changes in Danish dental care which aimed at effectuating a transition from six‐to‐twelve‐monthly dental recall intervals, for every patient, towards a model where patients with higher need receive dental recalls systematically more frequently than patients with lower need. Exploiting administrative data from the years 2012‐2016 from the Danish National Health Insurance database containing 72,155,539 treatment claims for 3,759,721 unique patients, we estimated a series of interrupted time‐series regression models with patient‐level fixed‐effects. In comparison to the pre‐reform period, the proportion of patients with recall intervals of up to 6 months was by 1.2%‐points larger post‐implementation; that of patients with 6‐12‐monthly recalls increased by 0.7%‐points; that of patients with more than 12‐monthly dental recalls decreased by 1.9%‐points. The composition of care shifted more substantially: the proportion of treatment sessions including preventive care increased by 31.5%‐points (95%‐CI: 31.4;31.6); that of sessions including scaling increased by 24.1%‐points (24.0;24.2); that of sessions including diagnostics decreased by 34.5%‐points (34.4;34.6). These findings suggest that dental care providers may have responded differently to regulatory changes than intended by the health policy.

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Health Services as Credence Goods: A Field Experiment

Cited by 28 publications

References 46 publications

Why prevent when it does not pay? Prevention when health services are credence goods

Why prevent when it does not pay? Prevention when health services are credence goods

Separation of prescription and treatment in health care markets: A laboratory experiment

Implementation of altered provider incentives for a more individual‐risk‐based assignment of dental recall intervals: evidence from a health systems reform in Denmark

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