Journal
JOURNAL OF DEVELOPMENT ECONOMICS
Volume 106, Issue -, Pages 156-167Publisher
ELSEVIER
DOI: 10.1016/j.jdeveco.2013.09.001
Keywords
Health insurance; Agency problems; Incentive; Drug prescription; Field experiment
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This study examines doctors' prescribing decisions using controlled hospital visits with randomized patient insurance and doctor incentive status. The results suggest that, when they expect to obtain a proportion of patients' drug expenditures, doctors write 43% more expensive prescriptions to insured patients than to uninsured patients. These differences are largely explained by an agency hypothesis that doctors act out of self-interest by prescribing unnecessary or excessively expensive drugs to insured patients, rather than by a considerate doctor hypothesis that doctors take account of the tradeoff between drug efficacy and patients' ability to pay. (C) 2013 Elsevier B.V. All rights reserved.
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