DaCHE discussion papers,
University of Southern Denmark, Dache - Danish Centre for Health Economics

Abstract: Objectives: A combination of public and private clinical practice by physicians, referred to as physician dual practice, is present in numerous health care systems. The phenomenon has been receiving attention in connection with arguments about its negative impact for the public provision of health care. A ban or restrictions on dual practice is widely advocated. The aim of this paper is to review and critically discuss the empirical and theoretical findings on the subject of physician dual practice and its effects for the provision of public health care. Methods: A systematic literature review, using electronic and manual searches, identified 23 positions on the subject of physician dual practice consisting of peer-reviewed journal articles, including two review articles on selected aspects of dual practice, academic working papers, book chapters, and WHO publications. Results: The subject is short on hard evidence. Theoretical analyses of dual practice impact on public health care provision shows that dual practice might bring about both positive and negative effects. Some of the conclusions on the negative effects of dual practice, however, depend on assumptions, which are questioned in broader economic literature. Moreover, while it seems that dual practitioners take up private practice predominantly to increase their income, it does not automatically imply that dual practice as a whole is a profit-maximising combination. Physicians seem to face promising opportunities in the private market. Still, they spend relatively little time in the private practice and supply labour to the lower paid public sector job. Eventually, the potential costs and effectiveness of dual practice regulation are rarely considered. Conclusions: Further research is needed into why physicians engage in dual practice and whether potential costs of dual practice outweigh the costs of enforcing restrictions on dual practice. A promising direction appears to be an analysis comparing the behaviour of the public sector physicians with and without dual practice, respectively, in a given institutional settings and under uniform assumptions about the objectives of the physicians in these two groups. Moreover, it seems useful to employ the labour economics framework for multiple job holding in the analysis of the dual practice effects. This framework helps to recognise that physicians holding two jobs might be different from single job holding physicians with regard to the most preferred combination of income and leisure, which implies differences in labour market participation constraints and marginal costs of labour/effort between the two groups.

Keywords: Dual practice; moonlighting physician; public-private practice.

JEL-codes: I12; I18; J08; J22

41 pages, October 1, 2010

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