Health Services As Credence Goods: A Field Experiment

53 Pages Posted: 18 Sep 2017 Last revised: 9 Nov 2018

See all articles by Felix Gottschalk

Felix Gottschalk

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

Wanda Mimra

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

Christian Waibel

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

Date Written: September 1, 2018

Abstract

Agency problems are a defining characteristic of health care markets. We present the results from a field experiment in the market for dental care: A test patient who does not need treatment is sent to 180 dentists to receive treatment recommendations. We vary the level of information and socio-economic status (SES) of the patient and collect measures of market conditions. We observe an overtreatment recommendation rate of 28% and a striking heterogeneity in treatment recommendations. We find significantly less overtreatment recommendations for patients with higher SES compared to lower SES under standard information. This difference diminishes for informed patients suggesting a complex role of patients' SES. Dentists with lower utilization, measured by waiting time for the next possible appointment, are more likely to propose unnecessary treatment.

Keywords: Health Care; Credence Goods; Overtreatment; Market Environment

JEL Classification: C93; D82; I11; L00

Suggested Citation

Gottschalk, Felix and Mimra, Wanda and Waibel, Christian, Health Services As Credence Goods: A Field Experiment (September 1, 2018). Available at SSRN: https://ssrn.com/abstract=3036573 or http://dx.doi.org/10.2139/ssrn.3036573

Felix Gottschalk (Contact Author)

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

Zürichbergstrasse 18
Zurich, 8092
Switzerland

Wanda Mimra

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

Zürichbergstrasse 18
Zurich, 8092
Switzerland

Christian Waibel

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

Zürichbergstrasse 18
Zurich, 8092
Switzerland

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