Physicians' multitasking and incentives: empirical evidence from a natural experiment

Area of Science:

• Health Economics
• Physician Behavior Analysis
• Healthcare Policy Evaluation

Background:

• Physicians operate in complex multitasking environments.
• Contractual changes and incentives significantly influence physician practice patterns.
• The Quebec government introduced an optional mixed compensation (MC) system in 1999, altering traditional fee-for-service (FFS) models.

Purpose of the Study:

• To analyze physician responses to contractual changes and incentives within a multitasking environment.
• To evaluate the impact of the mixed compensation (MC) system on physician practice choices.
• To understand the differentiated effects of incentives on various physician labor supply dimensions.

Main Methods:

• Combined panel survey and administrative data from Quebec physicians.
• Analyzed changes in practice choices following the introduction of the MC system.
• Examined a wide range of labor supply variables including patient time, teaching, administration, research, service volume, and time per service.

Main Results:

• Physicians switching from FFS to MC reduced billable service volume by 6.15%.
• Physicians decreased patient-facing work hours by 2.57% but increased average time per service by 3.81% (quality-quantity substitution).
• Time spent on non-remunerated teaching and administrative duties increased by 7.9%.

Conclusions:

• The mixed compensation (MC) system incentivized a shift in physician effort away from service volume towards non-billable activities and potentially higher quality care.
• Physician behavior is adaptable to financial and contractual incentives, with implications for healthcare resource allocation.
• Policy interventions like mixed compensation models can lead to significant, multifaceted changes in physician practice patterns.