Money talks: Paying physicians for performance

Arbeitspapier

Pay-for-performance attempts to tie physician payment to quality of care. In a controlled laboratory experiment, we investigate the effect of pay-for-performance on physician provision behavior and patient benefit. For that purpose, we compare a traditional fee-for-service payment system to a hybrid system that blends fee-for-service and pay-for-performance incentives. Physicians are found to respond to pay-for-performance incentives. Approximately 89 percent of the participants qualify for a pay-for-performance bonus payment in the experiment. It follows that a patient treated under the hybrid payment system is significantly more likely to receive optimal treatment than a similar fee-for-service patient. Pay-for-performance generally tends to alleviate over- and under-provision of medical treatment relative to fee-for-service. Irrespective of the payment system, we observe unethical treatment behavior, i.e., the provision of medical services with zero benefit to the patient.

Show object

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: cege Discussion Papers ; No. 173 [rev.]

Classification and Topics

• Classification: Wirtschaft
• Subject: experimental economics ; physician remuneration ; pay-for-performance (P4P)

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Keser, Claudia ; Peterle, Emmanuel ; Schnitzler, Cornelius
• Event: Veröffentlichung
• (who): University of Göttingen, Center for European, Governance and Economic Development Research (cege)
• (where): Göttingen
• (when): 2014

Further information

• Handle: http://hdl.handle.net/10419/103877