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The effect of physician remuneration on regional variation in hospital treatments

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  • Rudy Douven
  • Remco Mocking
  • Ilaria Mosca

Abstract

We study medical practice variations for nine hospital treatments in the Netherlands. Our panel data estimations include various control factors and physician’s role to explain hospital treatments in about 3,000 Dutch zip code regions over the period 2006–2009. In particular, we exploit the physicians’ remuneration difference—fee-for-service (FFS) versus salary—to explain the effect of financial incentives on medical production. We find that utilization rates are higher in geographical areas where more patients are treated by physicians that are paid FFS. This effect is strong for supply sensitive treatments, such as cataracts and tonsillectomies, while we do not find an effect for non-supply sensitive treatments, such as hip fractures. Copyright The Author(s) 2015

Suggested Citation

  • Rudy Douven & Remco Mocking & Ilaria Mosca, 2015. "The effect of physician remuneration on regional variation in hospital treatments," International Journal of Health Economics and Management, Springer, vol. 15(2), pages 215-240, June.
    • Handle: RePEc:kap:ijhcfe:v:15:y:2015:i:2:p:215-240
    DOI: 10.1007/s10754-015-9164-2
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    References listed on IDEAS

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    1. McGuire, Thomas G., 2000. "Physician agency," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 9, pages 461-536, Elsevier.
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    Cited by:

    1. Rudy Douven & Minke Remmerswaal & Ana Moura & Martin Salm, 2018. "Causes of regional variation in Dutch healthcare expenditures: evidence from movers," CPB Discussion Paper 384, CPB Netherlands Bureau for Economic Policy Analysis.
    2. Ana Moura & Martin Salm & Rudy Douven & Minke Remmerswaal, 2019. "Causes of regional variation in Dutch healthcare expenditures: Evidence from movers," Health Economics, John Wiley & Sons, Ltd., vol. 28(9), pages 1088-1098, September.
    3. Moura, Ana, 2021. "Essays in health economics," Other publications TiSEM c93abd22-fa4a-42a5-b172-d, Tilburg University, School of Economics and Management.
    4. Katalin Gaspar & France Portrait & Eric Hijden & Xander Koolman, 2020. "Global budget versus cost ceiling: a natural experiment in hospital payment reform in the Netherlands," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 21(1), pages 105-114, February.
    5. Ana Moura & Martin Salm & Rudy Douven & Minke Remmerswaal, 2019. "Causes of regional variation in Dutch healthcare expenditures: Evidence from movers," Health Economics, John Wiley & Sons, Ltd., vol. 28(9), pages 1088-1098, September.
    6. Douven, Rudy & Remmerswaal, Minke & Mosca, Ilaria, 2015. "Unintended effects of reimbursement schedules in mental health care," Journal of Health Economics, Elsevier, vol. 42(C), pages 139-150.

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