Physician altruism and moral hazard: (no) Evidence from Finnish national prescriptions data

Abstract

Statement of contributions:Authorship is in alphabetical order. GC contributed to data cleaning, data coding, and running the empirical analyses. MMG contributed to conceptually designing the study, securing the data, developing the empirical strategy, and drafting and revising the paper. IL contributed to conceptually designing the study, securing the data, and developing the theoretical model. MM contributed to conceptually designing the study, securing the data, developing the empirical strategy, data cleaning, data coding, running the empirical analyses, and drafting and revising the paper. MMG, IL and MM gratefully acknowledge financial support from the Academy of Finland (grant number 138723) and are grateful to KELA for sharing the data.

Physicians as Persuaders: Evidence from Hospitals in China

“…In other words, the physician trades off 1 dollar of her own income for roughly 9 dollars of patient out-of-pocket costs. This implied degree of altruism is lower than estimates from U.S. prescription drug marketsaround half in Schnell ( 2017 )-and from Japan, where the altruism weight exceeds one-half in Iizuka ( 2007 ), but higher than findings close to zero, such as Iizuka ( 2012 ) and Crea et al ( 2019 ).…”

“…This implied degree of altruism is lower than estimates from U.S. prescription drug markets—around half in Schnell (2017)—and from Japan, where the altruism weight exceeds one‐half in Iizuka (2007), but higher than findings close to zero, such as Iizuka (2012) and Crea et al. (2019).…”

Physicians as Persuaders: Evidence from Hospitals in China

“…In other words, the physician trades off 1 dollar of her own income for roughly 9 dollars of patient out-of-pocket costs. This implied degree of altruism is lower than estimates from U.S. prescription drug marketsaround half in Schnell ( 2017 )-and from Japan, where the altruism weight exceeds one-half in Iizuka ( 2007 ), but higher than findings close to zero, such as Iizuka ( 2012 ) and Crea et al ( 2019 ).…”

“…This implied degree of altruism is lower than estimates from U.S. prescription drug markets—around half in Schnell (2017)—and from Japan, where the altruism weight exceeds one‐half in Iizuka (2007), but higher than findings close to zero, such as Iizuka (2012) and Crea et al. (2019).…”

Explaining why increases in generic use outpace decreases in brand name medicine use in multisource markets and the role of regulation

“…While we cannot disentangle whether the behavior that lead to segment effects may be sticky, persistent or PLOS ONE altruistic, previous studies have documented these behavioral components of prescription decisions [11,19,51]. Coscelli (19) as well as Crea et al (11) show that habit persistence are important drivers of physician decisions in selected drug classes, but not altruism and moral hazard do not drive prescription decisions. Using strategic survey questions instead of prescription data, Cutler et al demonstrate that physician beliefs about treatments are much more important than organizational factors or patient demand (51).…”

“…The sizable segment effects across all outcomes that we identify confirm that changes in medicine use are not solely due to market structure effects, but also relate to physician behavior. While we cannot disentangle whether the behavior that lead to segment effects may be sticky, persistent or altruistic, previous studies have documented these behavioral components of prescription decisions [ 11 , 19 , 51 ]. Coscelli (19) as well as Crea et al (11) show that habit persistence are important drivers of physician decisions in selected drug classes, but not altruism and moral hazard do not drive prescription decisions.…”

The formation of physician altruism

“…Schnell's (2022) operational definition of altruism is in a similar spirit as the ones in Hellerstein (1998), whose theoretical and empirical models define physicians' altruism as the weight that physicians place in their utility function on the welfare of their patients when they decide to prescribe either a branded or a generic version of a drug. Similar conceptual or empirical frameworks have been used by, for example, Crea et al (2019), Granlund (2009), andLundin (2000) when looking at the choices by physicians of prescribing generic versus branded versions of the same drug.…”

Physicians as Persuaders: Evidence from Hospitals in China

“…In other words, the physician trades off 1 dollar of her own income for roughly 9 dollars of patient out-of-pocket costs. This implied degree of altruism is lower than estimates from U.S. prescription drug marketsaround half in Schnell ( 2017 )-and from Japan, where the altruism weight exceeds one-half in Iizuka ( 2007 ), but higher than findings close to zero, such as Iizuka ( 2012 ) and Crea et al ( 2019 ).…”

“…This implied degree of altruism is lower than estimates from U.S. prescription drug markets—around half in Schnell (2017)—and from Japan, where the altruism weight exceeds one‐half in Iizuka (2007), but higher than findings close to zero, such as Iizuka (2012) and Crea et al. (2019).…”

Explaining why increases in generic use outpace decreases in brand name medicine use in multisource markets and the role of regulation

“…While we cannot disentangle whether the behavior that lead to segment effects may be sticky, persistent or PLOS ONE altruistic, previous studies have documented these behavioral components of prescription decisions [11,19,51]. Coscelli (19) as well as Crea et al (11) show that habit persistence are important drivers of physician decisions in selected drug classes, but not altruism and moral hazard do not drive prescription decisions. Using strategic survey questions instead of prescription data, Cutler et al demonstrate that physician beliefs about treatments are much more important than organizational factors or patient demand (51).…”

“…The sizable segment effects across all outcomes that we identify confirm that changes in medicine use are not solely due to market structure effects, but also relate to physician behavior. While we cannot disentangle whether the behavior that lead to segment effects may be sticky, persistent or altruistic, previous studies have documented these behavioral components of prescription decisions [ 11 , 19 , 51 ]. Coscelli (19) as well as Crea et al (11) show that habit persistence are important drivers of physician decisions in selected drug classes, but not altruism and moral hazard do not drive prescription decisions.…”

The formation of physician altruism

“…Schnell's (2022) operational definition of altruism is in a similar spirit as the ones in Hellerstein (1998), whose theoretical and empirical models define physicians' altruism as the weight that physicians place in their utility function on the welfare of their patients when they decide to prescribe either a branded or a generic version of a drug. Similar conceptual or empirical frameworks have been used by, for example, Crea et al (2019), Granlund (2009), andLundin (2000) when looking at the choices by physicians of prescribing generic versus branded versions of the same drug.…”

Physicians as Persuaders: Evidence from Hospitals in China

“…In other words, the physician trades off 1 dollar of her own income for roughly 9 dollars of patient out-of-pocket costs. This implied degree of altruism is lower than estimates from U.S. prescription drug marketsaround half in Schnell ( 2017 )-and from Japan, where the altruism weight exceeds one-half in Iizuka ( 2007 ), but higher than findings close to zero, such as Iizuka ( 2012 ) and Crea et al ( 2019 ).…”

“…This implied degree of altruism is lower than estimates from U.S. prescription drug markets—around half in Schnell (2017)—and from Japan, where the altruism weight exceeds one‐half in Iizuka (2007), but higher than findings close to zero, such as Iizuka (2012) and Crea et al. (2019).…”

Explaining why increases in generic use outpace decreases in brand name medicine use in multisource markets and the role of regulation

“…While we cannot disentangle whether the behavior that lead to segment effects may be sticky, persistent or PLOS ONE altruistic, previous studies have documented these behavioral components of prescription decisions [11,19,51]. Coscelli (19) as well as Crea et al (11) show that habit persistence are important drivers of physician decisions in selected drug classes, but not altruism and moral hazard do not drive prescription decisions. Using strategic survey questions instead of prescription data, Cutler et al demonstrate that physician beliefs about treatments are much more important than organizational factors or patient demand (51).…”

“…The sizable segment effects across all outcomes that we identify confirm that changes in medicine use are not solely due to market structure effects, but also relate to physician behavior. While we cannot disentangle whether the behavior that lead to segment effects may be sticky, persistent or altruistic, previous studies have documented these behavioral components of prescription decisions [ 11 , 19 , 51 ]. Coscelli (19) as well as Crea et al (11) show that habit persistence are important drivers of physician decisions in selected drug classes, but not altruism and moral hazard do not drive prescription decisions.…”

The formation of physician altruism

“…Schnell's (2022) operational definition of altruism is in a similar spirit as the ones in Hellerstein (1998), whose theoretical and empirical models define physicians' altruism as the weight that physicians place in their utility function on the welfare of their patients when they decide to prescribe either a branded or a generic version of a drug. Similar conceptual or empirical frameworks have been used by, for example, Crea et al (2019), Granlund (2009), andLundin (2000) when looking at the choices by physicians of prescribing generic versus branded versions of the same drug.…”