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Prescription Behavior of Physicians in the Public and Private Sector

Author

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  • Elina Jussila
  • Kaisa Kotakorpi
  • Jouko Verho

Abstract

We analyze prescription behavior of physicians in the public and private sector. We study two major diseases for which an effective, widely accepted low-cost treatment and alternative, more expensive treatments are available. We find that private sector physicians are more likely to prescribe the expensive medication. The result holds after controlling for individual-level factors including health indicators based on detailed administrative data, and patient fixed effects. In one of our cases, we further find that the same physicians prescribe different medication when working in different sectors. These results are consistent with higher 2nd degree moral hazard in the private sector.

Suggested Citation

  • Elina Jussila & Kaisa Kotakorpi & Jouko Verho, 2022. "Prescription Behavior of Physicians in the Public and Private Sector," CESifo Working Paper Series 10186, CESifo.
    • Handle: RePEc:ces:ceswps:_10186
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    More about this item

    Keywords

    healthcare; prescription behaviour; public sector; private sector; moral hazard;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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