Although the role of the services sector in the economy has grown increasingly large, and partnerships are a prevalent form of organization in this sector, relatively little is known about the behavior and performance of these firms. In this paper an attempt is made to fill that gap by...

In this study we examine the effects of transferring physicians from a compensation system based on salary to a profit-sharing system. Consistent with theory, we find that the change has a large and significant effect on the quantity of services provided. In addition, we find a selection effect,...

We study the effect of physician incentives in an HMO network. Physician incentives are controversial because they may induce doctors to make treatment decisions that differ from those they would chose in the absence of incentives. We set out a theoretical framework for assessing the degree to...

The 'induced demand' model states that in the face of negative income shocks physicians may exploit their agency relationship with patients by providing excessive care in order to maintain their incomes. We test this model by exploiting an exogenous change in the financial environment facing...

Physicians, acting in their role as experts, are often faced with situations where they must trade off personal and patient welfare. Physicians' incentives vary based on the organizational environment in which they practice. We use the publication of a major clinical trial, which found that a...

More than one in four births are delivered by Cesarean section across the OECD where fee-for-service remuneration schemes generally compensate C-sections more generously than vaginal deliveries. In this paper, we exploit unique features of the Canadian health care system to investigate if...

We estimate an insurer-specific preference function which rationalizes hospital referrals for privately-insured births in California. The function is additively separable in: a hospital price paid by the insurer, the distance traveled, and plan and severity-specific hospital fixed effects...

This paper provides new evidence on the interaction between patient information and financial incentives in physician induced demand (PID). Using rich microdata on childbirth, we compare the treatment of physicians when they are patients with that of comparable non-physicians. We exploit a...

The overuse of medical services including antibiotics is often blamed on Physician Induced Demand. But since this theory is about physician motivations, it is difficult to test. We conduct an audit study in which physician financial incentives, beliefs about what patients want, and desires to...

Explicit financial incentives, especially pay-for-performance (P4P) incentives, have been extensively employed in recent years by health plans and governments in an attempt to improve the quality of health care services. This study exploits a natural experiment in the province of Ontario, Canada...