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Incentives and Choice in Health Care$
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Frank A. Sloan and Hirschel Kasper

Print publication date: 2008

Print ISBN-13: 9780262195775

Published to MIT Press Scholarship Online: August 2013

DOI: 10.7551/mitpress/9780262195775.001.0001

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PRINTED FROM MIT PRESS SCHOLARSHIP ONLINE (www.mitpress.universitypressscholarship.com). (c) Copyright The MIT Press, 2022. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in MITSO for personal use.date: 06 July 2022

Physician Fees and Behavior: Implications for Structuring a Fee Schedule

Physician Fees and Behavior: Implications for Structuring a Fee Schedule

Chapter:
(p.263) 10 Physician Fees and Behavior: Implications for Structuring a Fee Schedule
Source:
Incentives and Choice in Health Care
Author(s):

Thomas G. McGuire

Publisher:
The MIT Press
DOI:10.7551/mitpress/9780262195775.003.0010

This chapter examines physician fees and behavior and their implications for structuring a fee schedule. It discusses one of the major controversies in health economics: whether standard models apply to the physician market, or alternatively, whether physicians can and do induce demand for their products. It then considers a pricing system wherein a patient’s doctor would receive a fixed payment per period (for example, per month) for rendering services to that patient. In addition, however, the doctor would be paid less than the marginal cost for surgery. At least in theory, this approach would guarantee the patient’s adequate access to physicians’ services, but would discourage the doctor from recommending the surgical procedure. The chapter first comments on setting fees in markets versus setting fees by regulation. It then reviews the literature on physician behavior toward fees and discusses target income as well as physician-induced demand.

Keywords:   physician fees, fee schedule, physicians, health economics, pricing, payment, physician behavior, regulation, target income, physician-induced demand

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