Selection and Improvement: Physician Responses to Financial Incentives
35 Pages Posted: 29 Mar 2001
Date Written: July 2000
In this study we examine the effects of transferring physicians from a compensation system based on salary to a profit-sharing system. Consistent with theory, we find that the change has a large and significant effect on the quantity of services provided. In addition, we find a selection effect, where the least productive doctors leave the company and more productive doctors join.
Keywords: Physician, Compensation, Incentives, Hospital, Selection, Motivation
JEL Classification: I1, J3, L0, L3
Suggested Citation: Suggested Citation
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By Charles Zech