On the role of personality traits in shaping responses to physician payment systems

Abstract

We study the role of personality traits in explaining the heterogeneity in responses to common physician payment systems. We utilize data from several behavioral experiments (659 subjects) on physician payment systems and from post-experimental surveys on personality traits. The experiments use equivalent health framings and decision situations with either fee-for-service or capitation as baseline payments. Blended payment systems-performance pay and mixed systems-are introduced at a within-subject level to complement the baseline payments. We find that personality traits contribute to explaining some heterogeneity in behavioral responses to payment incentives. More agreeable individuals provide higher quality of care under baseline, mixed, and performance-pay systems. While introducing performance pay improves the quality, more conscientious and agreeable individuals respond less to capitation-based performance pay. Under mixed capitation-based systems, we observe an equivalent moderation of the incentive effect for more conscientious individuals. Under fee-for-service-based mixed or performance pay systems, personality traits do not significantly relate to individuals' behavior. Our findings inform the design of physician payment systems, in particular its tailoring based on personality traits, as well as the respective necessary organizational changes.

Keywords: Fee-for-service, capitation, pay for performance, mixed payment schemes, personality traits, quality of care, experimental data, heterogeneity JEL-Classification: C91, I11

JEL Classification: C91, I11