Scandinavian Working Papers in Economics

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

No 2023:5: Personality and physician performance pay: Evidence from a behavioral experiment in health

Mona Groß, Heike Hennig-Schmidt and Daniel Wiesen
Additional contact information
Mona Groß: Department of Health Care Management, University of Cologne, Germany
Heike Hennig-Schmidt: Department of Economics, University of Bonn, Germany Departement of Health Economics and Health Management, University of Oslo, Norway
Daniel Wiesen: Department of Health Care Management, University of Cologne, Germany

Abstract: We study how the heterogeneity in responses to performance pay can be explained by personality traits. We utilize data from behavioral experiments and surveys on personality traits with physicians, medical students, and non-medical students. Performance pay is introduced at a within-subject level and complements either fee-for-service or capitation. We find that the payment system matters regarding the behavioral impact of personality traits. More conscientious and more agreeable individuals provide higher quality of care under capitation. Although performance pay further improves the quality, more conscientious and agreeable individuals respond less to capitation-based performance pay. Other personality traits are not behaviorally relevant. Under fee-for-service-based schemes, personality traits do not significantly related to individuals’ behavior. Our findings inform the incentive design for physicians and the potential sorting into incentive schemes based on personality traits.

Keywords: Fee-for-service; capitation; blended pay for performance; personality traits; quality of care; heterogeneity

JEL-codes: C91; I11

Language: English

16 pages, September 7, 2023

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