Aligning Incentives of Physicians -- An Experimental Study of Two-part Tariffs and Separation of Prescription and Treatment in Health Care Markets | Duke Kunshan University
Aligning Incentives of Physicians -- An Experimental Study of Two-part Tariffs and Separation of Prescription and Treatment in Health Care Markets
chengxiang-tang
Speaker: 
Prof. Chengxiang Tang

Assistant Professor, School of Public Administration, Southwestern University of Finance and Economics

Aug 31st 2016 12:00 to 13:00
Room 1079, Academic Building

Summary of Talk:

Overtreatment is a typical problem in health care market where patients cannot verify whether their received treatments are appropriate to cure the illnesses or not. In this study, we investigate whether a separation of prescribing and treatment prices (a two-part tariff pricing, TPT) and a separation of prescribing and treatment agents (SPD) can mitigate the overtreatment issue and hence increase health care market efficiency, when patients can reject to receive prescribed treatments. We find that the SPD is more effective than the TPT in reducing overtreatment, albeit the rise of undertreatment in the former institution. When both SPD and TPT are implemented, the market efficiency is not improved further because of fewer diagnoses take-up resulting from bargaining failures between prescribing physicians, treatment physicians and patients.

 

Brief Biography:

Chengxiang Tang is Assistant Professor in the School of Public Administration at Southwestern University of Finance and Economics. He received a Bachelor Degree in Food Science and a Bachelor Degree in Business Administration from Southwestern University in 2006. He received a Ph.D. in economics from the University of New South Wales in 2015. Prior to this, he completed Masters in Social Medicine & Health Administration at Fujian Medical University. He also served as policy analyst of Fujian Health Department from 2009-2011. He has primary research interests in health economics, environmental economics, and policy science.