An Experiment on Referrals in Health Care

51 Pages Posted: 4 Nov 2016 Last revised: 9 Apr 2019

See all articles by Christian Waibel

Christian Waibel

ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich

Daniel Wiesen

University of Cologne

Date Written: April 7, 2017

Abstract

How referral fees affect primary care physicians' behavior is empirically not well understood. We conduct a behavioral experiment on referral fees in which subjects take the role of physicians. We exogenously vary the level of referral fees from specialists to primary care physicians and study their impact on primary care physicians' diagnostic effort and referrals. In a separate experiment, we elicit physicians' altruism. Compared to our baseline without referral fees, the introduction of low referral fees significantly increases referrals of patients that need specialist treatment among barely altruistic primary care physicians. High referral fees significantly increase referrals across all primary care physicians. Interestingly, diagnostic effort is not significantly affected by referral fees. Efficiency increases in referral fees. These increases are mainly driven by changes in referral behavior of barely altruistic primary care physicians.

Keywords: Referrals, diagnosis, altruism, efficiency, laboratory experiment

JEL Classification: I11, D47, C91

Suggested Citation

Waibel, Christian and Wiesen, Daniel, An Experiment on Referrals in Health Care (April 7, 2017). Available at SSRN: https://ssrn.com/abstract=2864336 or http://dx.doi.org/10.2139/ssrn.2864336

Christian Waibel (Contact Author)

ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich ( email )

Zürichbergstrasse 18
Zurich, 8092
Switzerland

Daniel Wiesen

University of Cologne ( email )

Albertus-Magnus-Platz
Cologne, 50923
Germany

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