Physicians’ incentives to adopt personalised medicine: Experimental evidence

• Published in: Journal of economic behavior & organization Vol. 191; pp. 686 - 713
• Main Authors: Bardey, David, Kembou, Samuel, Ventelou, Bruno
• Format: Journal Article
• Language: English
• Published: Elsevier B.V 01.11.2021; Elsevier
• Subjects: Capitation; Economics and Finance; Fee-forservice; Humanities and Social Sciences; Laboratory experiment; Pay-for-performance; Personalised medicine; Prospective physicians; Prospective physicians; Pay-for-performance; I11; Personalised medicine; Fee-forservice; C91; Laboratory experiment; Capitation
• ISSN: 0167-2681; 1879-1751; 0167-2681
• DOI: 10.1016/j.jebo.2021.07.037

We study physicians’ incentives to use personalised medicine techniques, replicating the physician’s trade-offs under the option of personalised medicine information. In a laboratory experiment conducted in two French Universities, prospective physicians played a real-effort game. We vary both the information structure (free access versus paid access to personalised medicine information) and the payment scheme (pay-for-performance (P4P), capitation (CAP) and fee-for-service (FFS)), implementing a within-subject design. Our results are threefold: (i) Compared to FFS and CAP, the P4P scheme strongly and positively impacts the decision to adopt personalised medicine. (ii) Although expected to dominate the other schemes, P4P is not always efficient in transforming free access to personalised medicine into higher quality of care. (iii) When it has to be paid for and after controlling for self-selection, personalised medicine is positively associated with quality, suggesting that subjects tend to make better use of information that comes at a cost. We find this effect to be stronger for males than for females prospective physicians. Quantification of our results however suggests that this positive impact is not strong enough to justify generalising the payment for personalised medicine access. Finally, we develop a theoretical model that includes in its set-up a commitment device component, which is the mechanism that we inferred from the data of the experiment. Our model replicates the principal results of the experiment, reinforcing the interpretation that the higher quality provided by subjects who bought personalised medicine can be interpreted as a commitment device effect.