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Medical insurance and free choice of physician shape patient overtreatment: a laboratory experiment

[working paper]

Huck, Steffen; Lünser, Gabriele; Spitzer, Florian; Tyran, Jean-Robert

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Please use the following Persistent Identifier (PID) to cite this document:http://hdl.handle.net/10419/103210

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Corporate Editor Wissenschaftszentrum Berlin für Sozialforschung gGmbH
Abstract In a laboratory experiment designed to capture key aspects of the interaction between physicians and patients in a stylized way, we study the effects of medical insurance and competition in the guise of free choice of physician. Medical treatment is an example of a credence good: only the physician (but not the patient) knows the appropriate treatment, and even after consulting, the patient is not sure whether he got proper treatment or got an unnecessary treatment, i.e. was overtreated. We find that with insurance, moral hazard looms on both sides of the market: patients consult more often and physicians overtreat more often than in the baseline condition. Competition decreases overtreatment compared to the baseline and patients therefore consult more often. When the two institutions are combined, competition is found to partially offset the adverse effects of insurance: most patients seek treatment, but overtreatment is moderated. (author's abstract)
Keywords patient; competition; therapy; health insurance fund; health insurance; physician-patient relationship
Classification Medical Sociology; Health Policy; Medicine, Social Medicine
Free Keywords Überbehandlung
Document language English
Publication Year 2014
City Berlin
Series Discussion Papers / Wissenschaftszentrum Berlin für Sozialforschung, Forschungsschwerpunkt Markt und Entscheidung, Abteilung Ökonomik des Wandels, SP II 2014-307
Status Published Version; reviewed
Licence Deposit Licence - No Redistribution, No Modifications