Negative Spillover on Service Level across Priority Classes: Evidence from a Radiology Workflow Platform

Abstract

We study the potential negative impact of imbalanced compensation schemes on firm performance. We use a dataset from a radiology workflow platform that connects off-site radiologists with hospitals. These radiologists select tasks from a common pool, while service level is defined by priority-specific turnaround time targets. However, imbalances between pay and workload of different tasks could result in higher priority tasks with low pay-to-workload ratio receiving poorer service. We investigate this hypothesis, showing turnaround time is decreasing in pay-to-workload for lower priority tasks, whereas it is increasing in workload for high-priority tasks. Crucially, we find evidence of a spillover effect: Having many economically attractive tasks with low priority can lead to longer turnaround times for higher priority tasks, increasing their likelihood of delay.

Keywords: Health Care Management, Negative Spillovers, Empirical Research, Incentives and Contracting, Platforms.