Time to revisit the agency theory and expand our thoughts on what motivates physicians? A nudge to health economists

DaCHE Discussion Papers 2/2022

8 Pages Posted: 28 Jan 2022

See all articles by Anne Sophie Oxholm

Anne Sophie Oxholm

University of Southern Denmark

Dorte Gyrd-Hansen

Danish Centre for Health Economics - DaCHE

Christian Bøtcher Jacobsen

Aarhus University - Department of Political Science

Ulrich Thy Jensen

affiliation not provided to SSRN

Line Bjørnskov Pedersen

Danish Centre for Health Economics - DaCHE

Date Written: January 21, 2022

Abstract

Health economists typically use agency theory to predict how physicians respond to various policy schemes. Empirical studies show that many schemes lead to unintended responses, indicating that current theoretical models fail to fully explain physicians’ behaviour. Drawing on key lessons from social psychology and public administration literatures, we propose to expand the principal-agent framework by unfolding physicians’ non-pecuniary motives to provide care using three components: patient benefits, intrinsic motivation, and societal benefits (externalities). We argue how each of these motivational components align with the existing agency framework and provide examples of how to measure the degree to which physicians are motivated by these components. Finally, we discuss how physicians’ non-pecuniary motives can be used to inform policymaking.

Keywords: Health care; agency theory; double agency; altruism; externalities; user orientation; intrinsic motivation; public service motivation; non-financial incentives

JEL Classification: I10; I11

Suggested Citation

Oxholm, Anne Sophie and Gyrd-Hansen, Dorte and Jacobsen, Christian Bøtcher and Jensen, Ulrich Thy and Bjørnskov Pedersen, Line, Time to revisit the agency theory and expand our thoughts on what motivates physicians? A nudge to health economists (January 21, 2022). DaCHE Discussion Papers 2/2022, Available at SSRN: https://ssrn.com/abstract=4014316 or http://dx.doi.org/10.2139/ssrn.4014316

Anne Sophie Oxholm (Contact Author)

University of Southern Denmark ( email )

Campusvej 55
DK-5230 Odense, 5000
Denmark

Dorte Gyrd-Hansen

Danish Centre for Health Economics - DaCHE ( email )

Denmark

Christian Bøtcher Jacobsen

Aarhus University - Department of Political Science

Bartholins Allé è
DK-8000 Aarhus, 8000
Denmark

Ulrich Thy Jensen

affiliation not provided to SSRN

Line Bjørnskov Pedersen

Danish Centre for Health Economics - DaCHE ( email )

Denmark

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
69
Abstract Views
331
Rank
544,374
PlumX Metrics