The Effects of Introducing Mixed Payment Systems for Physicians Experimental Evidence

Abstract

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The effects of competition on medical service provision

“…Observed behavioral patterns are consistent with an average degree of physician altruism α ∈ [0, 1]. Thus, our results on conditions without competition are in line with previous experimental evidence on physician payment (e.g., Brosig-Koch et al, 2016, 2017Godager & Wiesen, 2013;Hennig-Schmidt et al, 2011).…”

“…4 Introducing competition into the experimental set-up potentially entails fluctuations in the number of patients treated. This is in contrast with earlier experimental studies on physician treatment behavior, which consider the number of patients as fixed (like in Hennig-Schmidt et al, 2011, Brosig-Koch et al, 2016, 2017. Given that real physicians face fluctuations in demand as well (which may or may not be due to competition), we think that our setup incorporates a realistic feature.…”

“…One hundred and seventy-eight student participants were recruited using the online recruiting system ORSEE (Greiner, 2015). As Brosig-Koch et al (2016, 2017 do not find qualitatively different responses to CAP and FFS between medical students and students from other fields, our study is based on a conventional student subject pool. In total, we employed four competition conditions and four no-competition conditions varying the payment system (FFS vs. CAP) and the patient type (H vs. L).…”

“…Godager and Wiesen (2013) further observe a substantial heterogeneity in the degree of individual altruism. Focusing on mixed payment systems, Brosig-Koch et al (2017) demonstrate that individual responses can be accounted for by a behavioral model capturing physician altruism. In line with Godager and Wiesen (2013), the weight subjects attach to patients' health benefit differs substantially among subjects.…”

“…Note that the design of physicians' profits and patients' benefits implemented byBrosig-Koch et al (2016, 2017 and, consequently, also the design of profits and benefits used in our study is different from that used byHennig-Schmidt et al (2011) who study the effect of CAP and FFS payment without competition. Among others, Brosig-Koch et al designed incentives in a completely symmetric way that allows to directly compare trade-offs between profits and benefits across FFS and CAP payment.6 Convex cost functions are used in several theoretical models describing physician behavior (e.g.,Choné & Ma, 2011;Ma, 1994).…”