Scandinavian Working Papers in Economics

HERO On line Working Paper Series,
Oslo University, Health Economics Research Programme

No 2011:7: Profit or Patients' Health Benefit? Exploring the Heterogeneity in Physician Altruism

Geir Godager () and Daniel Wiesen ()
Additional contact information
Geir Godager: Department of Health Management and Health Economics, Postal: HERO / Department of Health Management and Health Economics P.O. Box 1089 Blindern, NO-0317 Oslo, Norway
Daniel Wiesen: BonnEconLab, Laboratory for Experimental Economics, University of Bonn and Chair of Quantitative

Abstract: This paper investigates physician altruism toward patients’ health benefit using behavioral data from the fully incentivized laboratory experiment of Hennig-Schmidt et al. (2011). This setup identifies both physicians’ profits and patients’ health benefit resulting from medical treatment decisions. We estimate a random utility model applying multinomial logit regression, finding that physicians attach a positive weight on patients’ health benefit. Furthermore, physicians vary substantially in their degree of altruism. Finally, we provide some implications for the design of physician payment schemes.

Keywords: Payment incentives; Physician altruism; Health Care Quantity

JEL-codes: C91; I11

18 pages, December 28, 2011

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