IDEAS home Printed from https://ideas.repec.org/a/eee/socmed/v120y2014icp40-48.html
   My bibliography  Save this article

Is the prescribing behavior of Chinese physicians driven by financial incentives?

Author

Listed:
  • Chen, Chun
  • Dong, Weizhen
  • Shen, Jay J.
  • Cochran, Christopher
  • Wang, Ying
  • Hao, Mo

Abstract

The prescribing behavior to prescribe high-priced drugs has been hypothesized to be related to the increasing drug expenditures in China, but little empirical evidence exists. The purpose of this study was to examine whether Chinese physicians, driven by financial incentives, tend to prescribe high-priced drugs. The 2000–2008 drug data in the Yangtze River Basin Hospitals' Drug Use Analysis System were analyzed to examine the prescription patterns of penicillins and cephalosporins in Shanghai. Among the top-100 drugs (by volume), cephalosporins cost as 1.1– 2.3 times as penicillins and their volume was 1.7–18.2 times. Revenues generated from prescribing cephalosporins were 3.4–24.2 times as those from prescribing penicillins. The tendency of prescribing relatively high-priced drugs was observed given the same chemical name, dosage, and specification but different trade names. Furthermore, high-priced drugs remained on the top-100 list with increasing volumes, while some lower-priced drugs exited from the list due to decreases in volumes. Facing the policy dilemmas, the Chinese government needs to implement a new financially rewarding system in which hospitals and physicians are able to achieve financial gains in a cost-effective way including prescribing similar drugs with lower prices. Reforming hospitals' payment methods is necessary and feasible to reshape financial incentives of healthcare providers. The combination of the global budget policy and financial incentive measures would be likely to change providers' prescribing behaviors towards a cost-effective direction.

Suggested Citation

  • Chen, Chun & Dong, Weizhen & Shen, Jay J. & Cochran, Christopher & Wang, Ying & Hao, Mo, 2014. "Is the prescribing behavior of Chinese physicians driven by financial incentives?," Social Science & Medicine, Elsevier, vol. 120(C), pages 40-48.
    • Handle: RePEc:eee:socmed:v:120:y:2014:i:c:p:40-48
    DOI: 10.1016/j.socscimed.2014.05.033
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S027795361400327X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.socscimed.2014.05.033?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Currie, Janet & Lin, Wanchuan & Zhang, Wei, 2011. "Patient knowledge and antibiotic abuse: Evidence from an audit study in China," Journal of Health Economics, Elsevier, vol. 30(5), pages 933-949.
    2. Brekke, Kurt R. & Grasdal, Astrid L. & Holms, Tor Helge, 2009. "Regulation and pricing of pharmaceuticals: Reference pricing or price cap regulation?," European Economic Review, Elsevier, vol. 53(2), pages 170-185, February.
    3. Kalo, Zoltan & Muszbek, Noemi & Bodrogi, Jozsef & Bidlo, Judit, 2007. "Does therapeutic reference pricing always result in cost-containment?: The Hungarian evidence," Health Policy, Elsevier, vol. 80(3), pages 402-412, March.
    4. Radyowijati, Aryanti & Haak, Hilbrand, 2003. "Improving antibiotic use in low-income countries: an overview of evidence on determinants," Social Science & Medicine, Elsevier, vol. 57(4), pages 733-744, August.
    5. World Bank, 2010. "Financing, Pricing, and Utilization of Pharmaceuticals in China," World Bank Publications - Reports 27598, The World Bank Group.
    6. John C. Langenbrunner & Cheryl Cashin & Sheila O’Dougherty, 2009. "Designing and Implementing Health Care Provider Payment Systems : How-To Manuals," World Bank Publications - Books, The World Bank Group, number 13806.
    7. Lundin, Douglas, 2000. "Moral hazard in physician prescription behavior," Journal of Health Economics, Elsevier, vol. 19(5), pages 639-662, September.
    8. Yip, Winnie & Eggleston, Karen, 2004. "Addressing government and market failures with payment incentives: Hospital reimbursement reform in Hainan, China," Social Science & Medicine, Elsevier, vol. 58(2), pages 267-277, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lins Ferreira, Vinicius & Pereira da Veiga, Cássia Rita & Kudlawicz-Franco, Claudineia & Scalercio, Priscila & Ramires, Yohanna & Pontarolo, Roberto & Carvalho, Denise Maria W. & da Veiga, Claudimar , 2017. "Generic drugs in times of economic crisis: Are there changes in consumer purchase intention?," Journal of Retailing and Consumer Services, Elsevier, vol. 37(C), pages 1-7.
    2. Guan, Xiaodong & Tian, Ye & Song, Jiafang & Zhu, Dawei & Shi, Luwen, 2019. "Effect of physicians' knowledge on antibiotics rational use in China's county hospitals," Social Science & Medicine, Elsevier, vol. 224(C), pages 149-155.
    3. Rizwan Raheem Ahmed & Dalia Streimikiene & Josef Abrhám & Justas Streimikis & Jolita Vveinhardt, 2020. "Social and Behavioral Theories and Physician’s Prescription Behavior," Sustainability, MDPI, vol. 12(8), pages 1-25, April.
    4. Fu, Hongqiao & Li, Ling & Yip, Winnie, 2018. "Intended and unintended impacts of price changes for drugs and medical services: Evidence from China," Social Science & Medicine, Elsevier, vol. 211(C), pages 114-122.
    5. Yushan Yu & Xiangyang Zhang & Caixia Sun & Huijie Zhou & Qi Zhang & Chun Chen, 2017. "Reducing the rate of cesarean delivery on maternal request through institutional and policy interventions in Wenzhou, China," PLOS ONE, Public Library of Science, vol. 12(11), pages 1-12, November.
    6. Gao, Lu & Shi, Leiyu & Meng, Qingyue & Kong, Xiangrong & Guo, Moning & Lu, Feng, 2021. "Effect of healthcare system reforms on public hospitals’ revenue structures: Evidence from Beijing, China," Social Science & Medicine, Elsevier, vol. 283(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lu, Fangwen, 2014. "Insurance coverage and agency problems in doctor prescriptions: Evidence from a field experiment in China," Journal of Development Economics, Elsevier, vol. 106(C), pages 156-167.
    2. Brekke, Kurt Richard & Holmås, Tor Helge & Straume, Odd Rune, 2013. "Margins and market shares: Pharmacy incentives for generic substitution," European Economic Review, Elsevier, vol. 61(C), pages 116-131.
    3. 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.
    4. Andia, Tatiana & Mantilla, César & Morales, Álvaro & Ortiz, Santiago & Rodríguez-Lesmes, Paul, 2022. "Does price-cap regulation work for increasing access to contraceptives? Aggregate- and pharmacy-level evidence from Colombia," Social Science & Medicine, Elsevier, vol. 311(C).
    5. Bingxiao Wu, 2014. "Mismeasurement in Pay-for-Performance: Evidence from an Intervention to Reduce Health Care Spending in China," Departmental Working Papers 201409, Rutgers University, Department of Economics.
    6. Carine Franc & Laurent Granier & Sébastien Trinquard, 2013. "Tarif forfaitaire de responsabilité : quels impacts sur le pharmacien ?," Working Papers halshs-00800457, HAL.
    7. Hokkanen, Joni & Kangasharju, Aki & Linnosmaa, Ismo & Valtonen, Hannu, 2012. "Generic substitution policy, prices and market structure: evidence from a quasi-experiment in Finland," Working Papers 35, VATT Institute for Economic Research.
    8. Sabine Vogler & Guillaume Dedet & Hanne Bak Pedersen, 2019. "Financial Burden of Prescribed Medicines Included in Outpatient Benefits Package Schemes: Comparative Analysis of Co-Payments for Reimbursable Medicines in European Countries," Applied Health Economics and Health Policy, Springer, vol. 17(6), pages 803-816, December.
    9. Lagarde, Mylène & Blaauw, Duane, 2022. "Overtreatment and benevolent provider moral hazard: Evidence from South African doctors," Journal of Development Economics, Elsevier, vol. 158(C).
    10. Yesim Köksal, Miyase, 2011. "Compassion and cost: The dual role of reference pricing," Working Papers in Economics 498, University of Gothenburg, Department of Economics.
    11. Matteo Galizzi & Simone Ghislandi & Marisa Miraldo, 2011. "Effects of Reference Pricing in Pharmaceutical Markets," PharmacoEconomics, Springer, vol. 29(1), pages 17-33, January.
    12. Lagarde, Mylène & Blaauw, Duane, 2022. "Overtreatment and benevolent provider moral hazard: evidence from South African doctors," LSE Research Online Documents on Economics 115383, London School of Economics and Political Science, LSE Library.
    13. Helen Lambert & Meixuan Chen & Christie Cabral, 2019. "Antimicrobial resistance, inflammatory responses: a comparative analysis of pathogenicities, knowledge hybrids and the semantics of antibiotic use," Palgrave Communications, Palgrave Macmillan, vol. 5(1), pages 1-13, December.
    14. Mujcic, Redzo & Frijters, Paul, 2013. "Still Not Allowed on the Bus: It Matters If You're Black or White!," IZA Discussion Papers 7300, Institute of Labor Economics (IZA).
    15. Tianyan Hu & Sandra L. Decker & Shin-Yi Chou, 2014. "The Impact of Health Insurance Expansion on Physician Treatment Choice: Medicare Part D and Physician Prescribing," NBER Working Papers 20708, National Bureau of Economic Research, Inc.
    16. Line Bjørnskov Pedersen & Julie Riise & Arne Risa Hole & Dorte Gyrd-Hansen, 2014. "GPs' shifting agencies in choice of treatment," Applied Economics, Taylor & Francis Journals, vol. 46(7), pages 750-761, March.
    17. Wagstaff, Adam & Yu, Shengchao, 2007. "Do health sector reforms have their intended impacts?: The World Bank's Health VIII project in Gansu province, China," Journal of Health Economics, Elsevier, vol. 26(3), pages 505-535, May.
    18. Wang, Jing & Gong, Yanhong & Wu, Jianxiong & Jiang, Nan & Chen, Zhenyuan & Yin, Xiaoxv, 2021. "Antibiotic dispensing patterns and patient interventions for upper respiratory tract infections by hospitals and retail pharmacies: A cross-sectional study based on standardized patients," Social Science & Medicine, Elsevier, vol. 272(C).
    19. Brekke, Kurt R. & Konigbauer, Ingrid & Straume, Odd Rune, 2007. "Reference pricing of pharmaceuticals," Journal of Health Economics, Elsevier, vol. 26(3), pages 613-642, May.
    20. Daniel Burkhard & Christian P. R. Schmid & Kaspar Wüthrich, 2019. "Financial incentives and physician prescription behavior: Evidence from dispensing regulations," Health Economics, John Wiley & Sons, Ltd., vol. 28(9), pages 1114-1129, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:socmed:v:120:y:2014:i:c:p:40-48. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/315/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.