[Show abstract][Hide abstract] ABSTRACT: Internationally, there is wide cross-country heterogeneity in government responses to dual practice in the health sector. This paper provides a uniform theoretical framework to analyze and compare some of the most common regulations. We focus on three interventions: banning dual practice, offering rewarding contracts to public physicians, and limiting dual practice (including both limits to private earnings of dual providers and limits to involvement in private activities). An ancillary objective of the paper is to investigate whether regulations that are optimal for developed countries are adequate for developing countries as well. Our results offer theoretical support for the desirability of different regulations in different economic environments.
Journal of Health Economics 09/2012; 32(1):66-87. · 2.25 Impact Factor
[Show abstract][Hide abstract] ABSTRACT: This article presents a thorough analysis of dual practice among physicians who work in both the public and private sectors. A conceptual framework is presented to help the reader understand dual practice and the contexts where it takes place. The article reviews the existing theoretical and empirical literature on this form of dual practice among physicians. It analyzes the extent of this phenomenon, the underlying factors that motivate physicians to engage in dual practice, and the main implications of their decision to do so. It also examines and discusses current policies that address dual practice. In this regard, the article provides some qualified support for the use of "rewarding" policies to retain physicians in the public sectors of more developed countries, while "limiting" policies are recommended for developing countries - with the caveat that the policies should be accompanied by the strengthening of institutional and contracting environments. The article highlights the lack of quality evaluative evidence regarding the consequences of dual practice on the delivery of health care services. It concludes that the overall impact of dual practice remains an open question that warrants more attention from researchers and policy makers alike.
Journal of Health Politics Policy and Law 04/2011; 36(2):265-94. · 1.24 Impact Factor
[Show abstract][Hide abstract] ABSTRACT: Many parts of the world are currently witnessing a controversial discussion concerning the appropriate design of the environment for clinical trials. The catalyst of this debate has been a number of highly publicized cases in which pharmaceutical firms are accused of having selectively disclosed evidence on marketed drugs. Many participants in the discussion promote greater transparency in clinical trials and support the introduction of mandatory clinical trials registries and results databases. This report draws upon prior work by the authors analyzing the effects of these regulations on a pharmaceutical firm's incentives to conduct clinical trials. Our findings add a new dimension to the discussion since they show the existence of a trade-off - as intended, registries and databases have the potential to increase transparency in clinical trials but they are likely to reduce the incentives to carry out clinical trials. This does not imply that these regulations are undesirable but it underlines the need for more research to be conducted on the incentive effects of these policies, because an informed policy choice must take into account all likely consequences of regulatory action and balance conflicting goals.
Expert Review of Pharmacoeconomics & Outcomes Research 06/2010; 10(3):247-51. · 1.67 Impact Factor
[Show abstract][Hide abstract] ABSTRACT: Scandals of selective reporting of clinical trial results by pharmaceutical firms have underlined the need for more transparency in clinical trials. We provide a theoretical framework which reproduces incentives for selective reporting and yields three key implications concerning regulation. First, a compulsory clinical trial registry complemented through a voluntary clinical trial results database can implement full transparency (the existence of all trials as well as their results is known). Second, full transparency comes at a price. It has a deterrence effect on the incentives to conduct clinical trials, as it reduces the firms' gains from trials. Third, in principle, a voluntary clinical trial results database without a compulsory registry is a superior regulatory tool; but we provide some qualified support for additional compulsory registries when medical decision-makers cannot anticipate correctly the drug companies' decisions whether to conduct trials.
Journal of Health Economics 08/2009; 28(6):1141-53. · 2.25 Impact Factor
[Show abstract][Hide abstract] ABSTRACT: We develop a principal-agent model in which the health authority acts as a principal for both a patient and a general practitioner (GP). The goal of the paper is to weigh the merits of gatekeeping versus non-gatekeeping approaches to health care when patient self-health information and patient pressure on GPs to provide referrals for specialized care are considered. We find that, when GPs incentives matter, a non-gatekeeping system is preferable only when (i) patient pressure to refer is sufficiently high and (ii) the quality of the patient's self-health information is neither highly inaccurate (in which case the patient's self-referral will be very inefficient) nor highly accurate (in which case the GP's agency problem will be very costly).
Health Economics 06/2009; 19(6):730-54. · 2.14 Impact Factor
[Show abstract][Hide abstract] ABSTRACT: This paper offers new support for the Porter Hypothesis within the context of a quality competition framework. We use a duopoly model of vertical product differentiation in which two firms simultaneously choose to produce either a high (environmentally friendly) quality or low (standard) quality variant of a good, before engaging in price competition. In this simple setting, we show that a Nash equilibrium of the game featuring the low-quality good can be Pareto dominated by a different strategy profile, in which both firms opt in favour of the "green" product. Our analysis demonstrates that, in such a case, both firms stand to profit from the introduction of a rule penalizing any firm refusing to produce the environmentally friendly product. We also find that consumers themselves may benefit from such regulations. This is always the case when shifting from low quality to high-quality production brings about a cost-efficiency improvement.
Journal of Environmental Economics and Management 03/2009; 57(2):182-194. · 2.17 Impact Factor
[Show abstract][Hide abstract] ABSTRACT: In this paper we propose a new approach for the design of pharmaceutical copayments. We departure from the standard efficiency argument that advocates for copayments that are decreasing in the health benefits of the patients in order to discipline consumption. Under our approach, copayments are justified by the difficulties for the provider to fully fund their health services.
[Show abstract][Hide abstract] ABSTRACT: Scandals of selective reporting of clinical trial results by pharmaceutical …rms have under-lined the need for more transparency in clinical trials. We provide a theoretical framework which reproduces incentives for selective reporting and yields three key implications concern-ing regulation. First, a compulsory clinical trial registry complemented through a voluntary clinical trial results database can implement full transparency (the existence of all trials as well as their results is known). Second, full transparency comes at a price. It has a deterrence e¤ect on the incentives to conduct clinical trials, as it reduces the …rms' gains from trials. Third, in principle, a voluntary clinical trial results database without a compulsory registry is a superior regulatory tool; but we provide some quali…ed support for additional compul-sory registries when medical decision-makers cannot anticipate correctly the drug companies' decisions whether to conduct trials.
[Show abstract][Hide abstract] ABSTRACT: Physician dual practice is a widespread phenomenon which has implications for the equity, efficiency and quality of health care provision. Central to the analysis of physician dual practice is the trade-off between its benefits and costs, as well as the convenience of regulating it to undermine its adverse consequences. In this paper, we study and analyze different governmental responses to this activity. We find that internationally, there are wide variations in how governments tackle this issue. While some governments fully prohibit this practice, others regulate or restrict dual job holding with different intensities and regulatory instruments. The measures implemented include limiting the income physicians can earn through dual job holding, offering work benefits to physicians in exchange for their working exclusively in the public sector, raising public salaries, and allowing physicians to perform private practice at public facilities. We present the pros and cons of each of these alternatives and show how the health care market and institutional arrangements are crucial for the design and implementation of each of these strategies. The paper also identifies the need for empirical evidence on the effect of different government strategies on dual practice.
Health Policy 01/2008; 84(2-3):142-52. · 1.73 Impact Factor
[Show abstract][Hide abstract] ABSTRACT: We provide a framework to analyze the incentives of pharmaceutical firms to generate scientific knowledge through clinical trials and investigate how these incentives are affected through different hotly debated regulatory environments. Our model can explain how the situations created by some of these environments triggered regulatory change and yields four key findings. First, a policy of full transparency -- which the medical literature promotes as the ideal scenario -- has a deterrence effect on the incentives to conduct clinical trials, as it reduces the firms' gains from trials. Second, a compulsory clinical trial registry complemented through a clinical trial results database can implement full transparency, provided the database is sufficiently comprehensive. Third, a clinical trial results database without a compulsory registry can, in principle, achieve full transparency without deterring trials and is, thus, a superior regulatory tool. Fourth, the effects of the regulations are to a large extent determined by the conditions under which product market competition takes place.
[Show abstract][Hide abstract] ABSTRACT: This paper presents a thorough analysis of the issue of dual job holding among physicians. As the causes and implications of this phenomenon may well depend on the specific form of dual practice under consideration, we first introduce a typology of dual practice in the health sector based on the public versus private nature of the activity and the work regime involved. Our primary focus is on public on private practice, since it is more prevalent and poses greater adverse welfare effects than do other forms. We commence our analysis with a review of the theoretical and empirical economic literature on public on private dual job holding among physicians in developing and developed countries and analyze its underlying motives and economic effects. We find that economic motives are not the only reason why physicians engage in dual practice. Other non-pecuniary factors such as job complementarities, and institutional, professional, structural and personal variables play a relevant role and, hence, should also be taken into account when regulating dual practice. Furthermore, while dual providers may be tempted to skimp on time and effort in their main job, to induce demand for their private services, or to misuse public resources, the legalization of dual practice may also contribute to recruit and retain physicians with less strain on the budget and improve access to health services, especially in developing countries. Finally, the paper highlights the lack of evidence regarding the extent and effects of this phenomenon. Given its implications for the equity, efficiency and quality of health care provision, dual practice among physicians warrants more attention from researchers and policy makers alike.
[Show abstract][Hide abstract] ABSTRACT: In this paper, we study a model a la Rogoff (1990) where politicians distort fiscal policy to signal their competency, but where fiscal policy can be centralized or decentralized. Our main focus is on how the equilibrium probability that fiscal policy is distorted in any region (the political budget cycle, PBC) differs across fiscal regimes. With centralization, there are generally two effects that change the incentive for pooling behavior and thus the probability of a PBC. One is the possibility of selective distortion: the incumbent can be re-elected with the support of just a majority of regions. The other is a cost distribution effect, which is present unless the random cost of producing the public goods is perfectly correlated across regions. Both these effects work in the same direction, with the general result that overall, the PBC probability is larger under centralization (decentralization) when the rents to office are low (high). Voter welfare under the two regimes is also compared: voters tend to be better off when the PBC probability is lower, so voters may either gain or lose from centralization. Our results are robust to a number of changes in the specification of the model.
[Show abstract][Hide abstract] ABSTRACT: This paper reviews the most relevant literature on dual job holding among physicians. In doing this, we follow an approach based in Economic Theory. The aim of this research is two-fold: First, we investigate the causes that lead some physicians who work in the public sector to engage in private practice. Secondly, we analyse the potential adverse consequences of dual practice on efficiency in the provision of health services. We find that although doctors may be driven mainly by economic reasons, there are other factors such as job complementarities, as well as institutional, professional and personal variables that may influence physician decisions on moonlighting. We also present and analyze the most relevant negative consequences of dual practice including: absenteeism, shirking, referral of patients, cream-skimming, and corruption.
[Show abstract][Hide abstract] ABSTRACT: Tuition fees increased rapidly in the 1990s in most Canadian provinces raising concerns about access to post-secondary education. This paper examines the role of tuition fees in explaining participation in college and university programs from 1997 to 1999 in all provinces except Quebec and Ontario. Differentiated responses to tuition fees by family income and grades are explored. Information on participation patterns of high school graduates is derived from the new Youth in Transition Survey. Other datasets provide approximate measures of tuition and of respondents’ family earnings. The analysis suggests that PSE choices were not particularly sensitive to either tuition fees at their current levels or to family earnings at the time of enrolment. By contrast, academic preparation and parental education were critical in determining whether students enrolled in PSE and which type of program they chose. These conclusions hold for the whole sample as well as for students from low-income families or with average grades. Three interpretations are possible for the lack of influence of tuition fees: 1) government student loans were able to meet the growing financial needs of most students; 2) the wage premium associated with PSE may have increased sufficiently in the late 1990s to offset the higher tuition fees; and 3) academic rather than financial barriers at the time of enrolment are perhaps what most prevent low-income students from attending PSE programs (e.g. no high school diploma), particularly at the university level.
Les frais de scolarité au collège et à l’université ont augmenté substantiellement au cours des années 90 dans la plupart des provinces canadiennes. L’augmentation des frais de scolarité remet en question l’accessibilité aux EPS en général et à l’université en particulier. Cette étude examine le rôle des frais de scolarité dans les décisions de participation au collège et à l’université entre 1997 et 1999 dans toutes
Université catholique de Louvain, Center for Operations Research and Econometrics (CORE), CORE Discussion Papers. 01/2006;
[Show abstract][Hide abstract] ABSTRACT: We consider an economy where public hospitals are capacity-constrained, and we analyse the willingness of health authorities to reach agreements with private hospitals to have some of their patients treated there. When physicians are dual suppliers, we show that a problem of cream-skimming arises and reduces the incentives of the health authority to undertake such a policy. We argue that the more dispersed are the severities of the patients, the greater the reduction in the incentives will be. We also show that, despite the patient selection problem, when the policy is implemented it is often the case that health authorities decide a more intensive transfer of patients to private practice.
Health Economics 06/2005; 14(5):513-27. · 2.14 Impact Factor
[Show abstract][Hide abstract] ABSTRACT: We develop a principal-agent model to analyze how the behavior of a physician in the public sector is affected by his activities in the private sector. We show that the physician will have incentives to over-provide medical services when he uses his public activity as a way of increasing his prestige as a private doctor. The health authority only benefits from the physician's dual practice when it is interested in ensuring a very accurate treatment for the patient. Our analysis provides a theoretical framework in which some actual policies implemented to regulate physicians' dual practice can be addressed. In particular, we focus on the possibility that the health authority offers exclusive contracts to physicians and on the implications of limiting physicians' private earnings.
Health Economics 07/2004; 13(6):505-24. · 2.14 Impact Factor