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Physician quality and payment schemes: A theoretical and empirical analysis

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  • Calub, Renz Adrian

Abstract

Physicians are expected to provide the best health care to their patients; however, it cannot be discounted that their practice is driven primarily by incentives. In this paper, we construct a physician utility maximization model that links physician quality to compensation schemes. Results show that relative to fixed payment, fee-for-service and mixed payment yield higher quality. Multinomial treatment effects regression of vignette scores on payment schemes also support this hypothesis, indicating that physicians are still below the best level of quality and that incentives to improve are still present.

Suggested Citation

  • Calub, Renz Adrian, 2014. "Physician quality and payment schemes: A theoretical and empirical analysis," MPRA Paper 66038, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:66038
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    References listed on IDEAS

    as
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    Cited by:

    1. Kiplagat, Isabella & Mugo, Mercy & Oleche, Martine O., 2021. "Provider Process Quality of Healthcare and its Determinants in Kenya," African Journal of Economic Review, African Journal of Economic Review, vol. 9(4), September.

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    More about this item

    Keywords

    Physician; quality of healthcare; incentives; compensation schemes;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations

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