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Physician agency in China: Evidence from a drug-percentage incentive scheme

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  • Wu, Bingxiao

Abstract

This paper examines how physicians respond to financial incentives in China. Faced with the requirement to lower drug expenditure as a percentage of the total medical expenditure, physicians increased non-drug expenditure in addition to decreasing drug expenditure, keeping the total expenditure at the historical level. This shift in the expenditure mix was observed only among insured patients, highlighting the role of patient insurance status in affecting the extent to which physician agency drives medical decision making.

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  • Wu, Bingxiao, 2019. "Physician agency in China: Evidence from a drug-percentage incentive scheme," Journal of Development Economics, Elsevier, vol. 140(C), pages 72-89.
    • Handle: RePEc:eee:deveco:v:140:y:2019:i:c:p:72-89
    DOI: 10.1016/j.jdeveco.2019.05.007
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    Cited by:

    1. Zhou, Mei & Zhao, Shaoyang & Fu, Mingwei, 2021. "Supply-induced demand for medical services under price regulation: Evidence from hospital expansion in China," China Economic Review, Elsevier, vol. 68(C).
    2. SUN Jessica Ya & YIN Ting & LIU Zhiyong, 2023. "When State Becomes the Only Buyer: Effects of national volume-based procurement of cardiac stents in China," Discussion papers 23065, Research Institute of Economy, Trade and Industry (RIETI).
    3. Meng‐Chi Tang, 2023. "A structural analysis of physician agency and pharmaceutical demand," Health Economics, John Wiley & Sons, Ltd., vol. 32(7), pages 1453-1477, July.
    4. Mengna Luan & Wenjing Shi & Zhigang Tao & Hongjie Yuan, 2023. "When patients have better insurance coverage in China: Provider incentives, costs, and quality of care," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 31(4), pages 1073-1106, October.

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    More about this item

    Keywords

    Physician agency; Chinese health care system; Drug percentage; Healthcare expenditure;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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