[劳动经济学研讨会]Financial Incentives and Physician Prescribing Behavior

【主题】Financial Incentives and Physician Prescribing Behavior—Evidence from the Regulatory Change of Healthcare Price Structure in China
【Abstract】  This paper empirically investigates how financial incentives affect physician prescribing behavior in an environment that physicians both prescribe and dispense medicine. Our identification strategy employs an exogenous policy shock which abolishes the 15% markup on drug sales and raises the visit fee by a large margin at the same time. Using a regression discontinuity design based on patient-visit-level data, we find that the policy shock leads to an 6.7% decrease in total expenditure per visit on average. Not only the abolishment of markup drives the decline in total expenditure, but also that the rise in the visit fee dampens physicians` over-pre1111ion. Exactly, the variety of medicine prescribed by physician reduces by 0.15, and spending on examination and check decreases on the order of 13.3%. There exists heterogeneity in the effect of the shock among diseases.
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