GPs as citizens' agents: prescription behavior and altruism

To curb the heavily increasing drug budgets some Danish counties have introduced voluntary agreements between general practitioners (GPs) and health authorities. We extend the models of generic prescription by Hellerstein (Rand J Econ 29(1):108-136, 1998) and Lundin (J Health Econ 19:639-662, 2000) to allow for substitution between analogues and use difference-in-difference models to assess the effect on two drug groups (lipid-lowering and rheumatism drugs). For both drug groups we find evidence of a significant effect of the intervention. In the case of lipid-lowering drugs, we found a significant larger impact on GPs with low loyalty to the insurer and with indication of low prescription quality. In contrast we found that the intervention had a significantly lower impact on this group of GPs in the case of rheumatism drugs. We conclude that the effectiveness of the voluntary approach may partly be due to its indirect effect on GPs' altruistic motivation, which makes the GPs and the authorities collide in a common agency role.