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Related Experiment Videos

Physician response to fee changes with multiple payers.

T G McGuire1, M V Pauly

  • 1Department of Economics, Boston University, MA 02215.

Journal of Health Economics
|December 10, 1990
PubMed
Summary
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Physicians" behavior, whether profit maximization or target income, influences their response to fee changes. Understanding these physician economics is crucial for effective healthcare fee policies.

Area of Science:

  • Health Economics
  • Physician Behavior Modeling
  • Healthcare Policy

Background:

  • Physician behavior significantly impacts healthcare costs and service delivery.
  • Existing models often simplify physician motivations, neglecting nuanced economic drivers like demand inducement.
  • Understanding how physicians respond to fee adjustments is vital for healthcare policy and market dynamics.

Purpose of the Study:

  • To develop a general model of physician behavior incorporating demand inducement.
  • To analyze physician responses to fee changes under different behavioral assumptions (profit maximization vs. target income).
  • To explore the implications for healthcare fee policies and empirical research.

Main Methods:

  • Development of a general theoretical model of physician behavior.

Related Experiment Videos

  • Analysis of physician responses to fee changes using derived own and cross-price expressions.
  • Consideration of scenarios with multiple payers and varying income effects.

    • Main Results:

    • Physicians exhibit profit maximization behavior when income effects are absent.
    • Physicians aim for a target income when income effects are strong.
    • The model provides distinct predictions for physician responses to fee changes based on their underlying behavior.

    Conclusions:

    • Physician behavior is not monolithic and depends on economic factors like income effects.
    • Fee policies must account for different physician motivations to be effective.
    • The developed model offers a more realistic framework for studying physician responses to economic incentives in healthcare.