Physician behavior and health outcomes

There is increasing empirical evidence of patient harmand resource waste from overdiagnosis, over-treatment, medical errors, and the underuse of effective care. This chapter reviews recent literature on physician behaviour and health outcomes. Research on the economics of physician behaviour takes a classical economic perspective based on using financial incentives to solve information problems in healthcare markets. The evidence on payment methods, competition and market organisation, and information interventions is summarised. Incentives matter, but may matter less in the presence of altruistic motives amongst most physicians, as well as the presence of complex multi-tasking decision environments. More contemporary research on physician behaviour has taken a behavioural perspective where it is acknowledged that physician decision making can be biased even in cases where incentive and information problems are absent. The large health services research literature on professional behaviour change incorporates behavioural and psychological perspectives yet integration into economic models of physician behaviour is still in its early stages. Though research on incentives continues to dominate the health economics literature, evidence suggests that behavioural approaches are important not only in understanding incentives, but in changing physicians’ behaviour using non-pecuniary interventions.