Does Patient Use of Medical Information Affect Physician Practice Incentives to Provide Care?

Patients as consumers are assuming a more active role in their medical care decision-making, which has been prompted by better access to medical information. Patient use of medical information may affect physician practice incentives to provide care, which critically depends on the agency relationship between physician and patient. If patient use of medical information improves communication and understanding, physicians may need to spend less time explaining what treatments are needed and convincing patients about the appropriateness of their recommendations, increasing incentives to provide care. If patients use information to demand treatments and procedures that are at odds with what the physician would recommend, this might lead to a contentious relationship, making it more difficult to agree upon any course of treatment. We use the Community Tracking Study (CTS) physician survey data, a nationally representative sample in the United States, to study the effects of more-informed patients on physician incentives to provide care. We estimate ordinary least squares and ordered probit models, and apply instrumental variables method to correct for the potential endogeneity of the measure of more-informed patients. The empirical results indicate that more-informed patients appear to be reducing physician incentives to provide care. This is consistent with the view that patient use of medical information from alternative sources besides their own physician may be interfering with the physician’s ability to provide care.