Testing the effects of doctors’ remuneration schemes and altruism in a multitasking environment: A real effort laboratory experiment.

This study investigates the effects of fee-for-service, capitation and salary, as well as the presence of benefits for patients

Abstract

In this study, we investigate the effects of fee-for-service, capitation and salary, as well as the presence of benefits for patients, on the quantity and quality of effort provided by medical students in a laboratory setting. We designed a real-effort experiment, the first of its kind, to simulate the incentives and context surrounding the provision of health care services. We find that salary produces the lowest quantity of output, however our data do not show that FFS leads to a higher quantity of output than capitation. We find that the highest quality is achieved when participants are paid by salary, followed by capitation. We also find that there is less shirking under salary. Finally, the presence of patient benefits significantly increases the quality of performance, while it has no significant impact on quantity of output. The experiment was run in a computer laboratory with third and fourth year classes of medical students from the Faculty of Health Sciences at the University of Witwatersrand (Johannesburg, South Africa).

This research is supported by the Department for International Development’s RESYST (Resilient and Responsive Health Systems) programme which is led by the London School of Hygiene & Tropical Medicine

Citation

Lagarde, M.; Blaauw, D. RESYST Working Paper 5. Testing the effects of doctors’ remuneration schemes and altruism in a multitasking environment: A real effort laboratory experiment. (2014) 39 pp.

Published 1 January 2014