Professional uncertainty and physician medical decision-making in a multiple treatment framework

This paper develops a new microanalytic approach to physician medical decision-making treatment setting. Physician medical decision-making is modelled as a two-stage sequential process. In Stage 1, the patient's illness is diagnosed and the health outcomes for all illness-related restoration options are identified. In Stage 2, an "optimal" restoration option is selected. This model provides new insights into physician medical decision-making and the complexity of proving physician-induced demand in a medical care market where professional uncertainty and consumer heterogeneity exist.