Scandinavian Working Papers in Economics

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

No 2018:3: Dishonesty in healthcare practice: A behavioral experiment on upcoding in neonatology

Heike Hennig-Schmidt (), Hendrik Jürges and Daniel Wiesen
Additional contact information
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
Hendrik Jürges: Schumpeter School of Business and Economics, Postal: Schumpeter School of Business and Economics, University of Wuppertal, Germany
Daniel Wiesen: Department of Business Administration and Health Care Management, Postal: Department of Business Administration and Health Care Management, University of Cologne

Abstract: We introduce a controlled behavioral experiment framed in a neonatal care context to analyze the effect of introducing a random audit and fines on individuals' honesty in a simple reporting task. Our behavioral data provide new evidence on dishonesty and upcoding in health care. We find that introducing audits combined with a fine significantly reduces dishonesty on aggregate. The effect is driven by a significant reduction in upcoding. At the same time, dishonest choices that cannot be detected as fraudulent by an audit (partial dishonesty) increase. We also find evidence that individual characteristics such as gender, medical background, and integrity are related to dishonest behavior.

Keywords: Dishonesty; audits and fines; neonatology; medically framed experiment; reporting of birth weights

JEL-codes: D03; I11; I18

34 pages, April 4, 2018

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