Working Paper: NBER ID: w10017
Authors: Jason Barro; Nancy Beaulieu
Abstract: In this study we examine the effects of transferring physicians from a compensation system based on salary to a profit-sharing system. Consistent with theory, we find that the change has a large and significant effect on the quantity of services provided. In addition, we find a selection effect, where the least productive doctors leave the company and more productive doctors join.
Keywords: financial incentives; physician compensation; profit sharing
JEL Codes: I1; J3; L3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| least productive doctors exiting (J44) | selection effect favoring more productive physicians (I11) |
| profit-sharing model (G35) | physician productivity (I11) |
| profit-sharing model (G35) | revenues per physician (I11) |
| profit-sharing plan (G35) | attracting new productive doctors (J44) |
| profit-sharing model (G35) | increase in net income (G39) |