Scandinavian Working Papers in Economics

HERO Online Working Paper Series,
University of Oslo, Health Economics Research Programme

No 2014:4: Does performance disclosure influence physicians’ medical decisions? An experimental study*

Geir Godager (), Heike Hennig-Schmidt and Tor Iversen
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
Heike Hennig-Schmidt: 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
Tor Iversen: 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

Abstract: Quality improvements in markets for medical care are key objectives in any Health reform. An important question is whether disclosing physicians’ performance can contribute to achieving these goals. Due to the asymmetric information inherent in medical markets, one may argue that changes in the information structure are likely to influence the environment in which health care providers operate. In a Laboratory experiment with medical students that mimics a physician decision-making environment we analyze the effect of disclosing performance information to peers. We find that making performance transparent has a positive impact in that significantly higher total patient benefits are generated than under a regime where physician performance is private information. Also, significantly more patients receive benefit-maximizing treatment. We discuss policy implications of our findings

Keywords: Physician payment system; laboratory experiment; incentives; transparency; fee-for-service; information and product quality

JEL-codes: C91; H40; I11; J33; L15

34 pages, November 27, 2014

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