NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Selection and Improvement: Physician Responses to Financial Incentives

Jason Barro, Nancy Beaulieu

NBER Working Paper No. 10017*
Issued in October 2003
NBER Program(s):   HE

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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, where the least productive doctors leave the company and more productive doctors join.

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