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How Does The Type of Remuneration Affect Physician Behavior? Fixed Salary versus Fee-for-Service

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(2020) American Journal of Health Economics , 6

How does the type of pay change the behaviour of doctors in norway?

In this study, the authors compare how the type of pay of Norwegian general practitioners affects the way they monitor and treat their patients. Two essential forms of pay are at issue: a fixed salary or a variable payment, depending on the services provided.

What the main findings of this study seem to indicate is that patients accompanied by doctors receiving variable pay do more tests, have more appointments, but are also less likely to be admitted to the emergency ward within two weeks of their most recent appointment.

While it is true that we may have a higher cost with treatments, and this is important for those who pay for them, we may also have a saving, because the probability of patients having to be admitted to the emergency ward is lower when they are being monitored by doctors who receive variable pay.

However, these are extremely complex issues, and so the authors prefer not to excessively focus on these divisions. The data seem to indicate a trend, which is important to consider when dealing with these issues: incentives matter, and doctors respond positively to financial incentives.

This study was made possible by the availability of robust data in Norway, not only on the forms of pay of doctors but also the medical acts they conducted over the period under review, 2009 to 2013. In this time interval it was even possible to compare the data of doctors who worked with the two forms of pay.

Unfortunately, this type of data is not available in Portugal, which would be important not only to permit other academic work, but even to define future pay policies for doctors.