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Should physicians' dual practice be limited? An incentive approach
Author(s) -
González Paula
Publication year - 2004
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/hec.890
Subject(s) - incentive , limiting , private practice , dual (grammatical number) , prestige , medical practice , business , private sector , principal (computer security) , earnings , public relations , actuarial science , medicine , family medicine , economics , accounting , political science , microeconomics , economic growth , computer science , mechanical engineering , art , linguistics , philosophy , literature , engineering , operating system
We develop a principal‐agent model to analyze how the behavior of a physician in the public sector is affected by his activities in the private sector. We show that the physician will have incentives to over‐provide medical services when he uses his public activity as a way of increasing his prestige as a private doctor. The health authority only benefits from the physician's dual practice when it is interested in ensuring a very accurate treatment for the patient. Our analysis provides a theoretical framework in which some actual policies implemented to regulate physicians' dual practice can be addressed. In particular, we focus on the possibility that the health authority offers exclusive contracts to physicians and on the implications of limiting physicians' private earnings. Copyright © 2004 John Wiley & Sons, Ltd.