Fee for service vs. capitation: How financial incentives affect medical service provision

Today I will be briefly be reviewing four recent articles which examine how physician payment methods affect the amount of medical service provision. GP reimbursement in Ireland Madden, Nolan and Nolan (Health Econ 2005) use a quasi-experimental framework to see how changing physician compensation affects the number of doctors visits. In Ireland approximately 30% of…

Physician licensure and quality: Part VII

One final example of licensure’s impact on quality is given by a 1978 study of the quality of contact lens fitting.  The study looked at 502 households who had been fitted for contacted lenses in the previous three years and were still wearing contacts.  The study was conducted with the cooperation of the American Academy…

Physician licensure and quality: Part V

During the past few days, I have written extensively on the reasoning behind why society would wish to create a licensing arrangement for some professions. Today, I will review Hayne Leland’s 1979 paper which develops a mathematical model which explicitly describes the welfare implications of licensure. Model Leland uses a Akerlof style set-up where the…

Physician licensure and quality: Part IV

Another example of how physician licensure affects earnings is a paper by Keith Leffler. In the paper, Leffler looks at the different states who accepted and refused to accept the Federal Licensing Exam (FLEX) in the late 1960s. Leffler proposes that if physicians acted as a cartel, only states with lenient state examinations would accept…

Physician licensure and quality: Part III

What is the purpose for licensing physicians?  For the general public, the answer seems obvious: society must prevent individuals from consuming low-quality health care.  From the economist’s point of view, this reasoning is not very compelling.  If individuals are looking out for their own best interests, it would be illogical for them to consume low-quality medical care…