Physicians’ Incentives to Adopt Personalized Medicine: Experimental Evidence

39 Pages Posted: 26 Nov 2018

See all articles by David Bardey

David Bardey

Universidad de los Andes, Colombia - Department of Economics

Samuel Kembou Nzale

Aix-Marseille University - Aix-Marseille School of Economics

Bruno Ventelou

University of Angers - Research Group in Quantitative Saving (GREQAM); University of Angers - French Institute of Health and Medical Research (INSERM)

Date Written: November 20, 2018

Abstract

We study physicians’ incentives to use personalized medicine techniques, replicating the physician’s trade-offs under the option of personalized medicine information. In a laboratory experiment where prospective physicians play a dual-agent real-effort game, we vary both the information structure (free access versus paid access to personalized medicine information) and the payment scheme (pay-for-performance (P4P), capitation (CAP) and fee-for-service (FFS)) by applying a within-subject design. Our results are threefold. i) Compared to FFS and CAP, the P4P payment scheme strongly impacts the decision to adopt personalized medicine. ii) Although expected to dominate the other schemes, P4P is not always efficient in transforming free access to personalized medicine into higher quality patient care. iii) When it has to be paid for, personalized medicine is positively associated with quality, suggesting that subjects tend to make better use of information that comes at a cost. We conclude that this last result can be considered a “commitment device”. However, quantification of our results suggests that the positive impact of the commitment device observed is not strong enough to justify generalizing paid access to personalized medicine.

Keywords: Personalized medicine, fee-for-service, capitation, pay-for-performance, physician altruism and laboratory experiment

JEL Classification: C91, I11

Suggested Citation

Bardey, David and Kembou Nzale, Samuel and Ventelou, Bruno, Physicians’ Incentives to Adopt Personalized Medicine: Experimental Evidence (November 20, 2018). Documento CEDE No. 2018-59, Available at SSRN: https://ssrn.com/abstract=3288807 or http://dx.doi.org/10.2139/ssrn.3288807

David Bardey (Contact Author)

Universidad de los Andes, Colombia - Department of Economics ( email )

Carrera 1a No. 18A-10
Santafe de Bogota, AA4976
Colombia

Samuel Kembou Nzale

Aix-Marseille University - Aix-Marseille School of Economics ( email )

2 rue de la Charité
Marseille, 13236
France

Bruno Ventelou

University of Angers - Research Group in Quantitative Saving (GREQAM) ( email )

Centre de la Vieille Charité
2, rue de la Charité
Marseille, 13002
France

University of Angers - French Institute of Health and Medical Research (INSERM) ( email )

101 rue de Tolbiac
75654 Paris Cedex 13
France

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