Physician s Allocation Preferences under Scarcity and Uncertainty

Physicians are no strangers to situations where they have to decide with resource restrictions and uncertainty on the relative needs of future beneficiaries of the scarce resources. We propose a lab experiment to understand if such an environment affects physician’s resource allocation decisions and how. When there are incentives to over-treat, we find that a patient tended by a constrained physician under uncertainty obtains higher benefits and receives allocations closer to her optimum than patients from physicians with no constraints or deciding under uncertainty alone. In addition, we observe a redistribution of resources when physicians decide with resource restrictions and uncertainty. In particular, when resources are scarce, physicians tend to allocate the limited services to patients with higher benefits in the absence of medical services, a higher capacity to benefit from the resources, the scantiest need for service units, and the lowest benefits at the optimum. Finally, we find that constraints, with or without complete information on patient characteristics, lead selfish physicians to approximate to what is best for the patient.