Working paper

Physicians’ incentives to adopt personalized medicine: experimental evidence

David Bardey, Samuel Kembou Nzalé, and Bruno Ventelou

Abstract

We study physicians’ incentives to use personalized medicine techniques, replicating the physician’s trade-offs under the option of personalized medicine information. In a laboratory experiment where prospective physicians play a dual-agent real-effort game, we vary both the information structure (free access versus paid access to personalized medicine information) and the payment scheme (pay-for-performance (P4P), capitation (CAP) and fee-for-service (FFS)) by applying a within-subject design. Our results are threefold. i) Compared to FFS and CAP, the P4P payment scheme strongly impacts the decision to adopt personalized medicine. ii) Although expected to dominate the other schemes, P4P is not always efficient in transforming free access to personalized medicine into higher quality patient care. iii) When it has to be paid for, personalized medicine is positively associated with quality, suggesting that subjects tend to make better use of information that comes at a cost. We conclude that this last result can be considered a “commitment device”. However, quantification of our results suggests that the positive impact of the commitment device observed is not strong enough to justify generalizing paid access to personalized medicine.

Keywords

Personalized medicine; fee-for-service; capitation; pay-for-performance; physician altruism and laboratory experiment;

JEL codes

  • C91: Laboratory, Individual Behavior
  • I11: Analysis of Health Care Markets

Reference

David Bardey, Samuel Kembou Nzalé, and Bruno Ventelou, Physicians’ incentives to adopt personalized medicine: experimental evidence, TSE Working Paper, n. 18-968, November 2018.

See also

Published in

TSE Working Paper, n. 18-968, November 2018