Time：June 9, 2021, 10:00-11:30am

Venue：RM 606, School of Economics 

Speaker：ZHAO Xin, Associate Professor, University of International Business and Economics

Topic: Financial Incentives, Physician Behavior, and Patient Outcomes: A Natural Experiment on Physician Remuneration

The efficient incentivization of physicians is a central question of health economics. In this paper, we answer this question using a randomized remuneration reform. Applying a difference-in-differences design to a unique, granular dataset, we find that physicians in the treatment group perform 3.2 percentage points (21%) more surgeries, costing the patients 3.9% more per day, at the expense of a 1.4 percentage point reduction in recovery rates. A closer examination unveils large heterogeneity in responses across physicians, patients, and types of utilization: (1) Physicians who are young, female, low-rank, and hold high education degrees are more responsive to the increased financial incentives. (2) Patients covered by more generous insurance contracts experience the sharpest spike in monetary costs, while those uninsured shoulder the cost of reduced health outcomes. (3) Medical procedures see faster growths than diagnostic tests, whereas prescriptions do not experience any significant change.