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Income effects and physician labour supply: evidence from the threshold system in Ontario

Author

Listed:
  • Jasmin Kantarevic
  • Boris Kralj
  • Darrel Weinkauf
Abstract
. We examine a reform to the physician threshold system in Ontario that provides a unique opportunity to assess the effect of fee changes on physician behaviour, free from the biases that potentially affect simple time‐series or cross‐section inference. We find that: (1) the income effects of fee changes are small, but significant; (2) the income effect dominates the substitution effect only for a minority of services with relatively low prices and high volumes; and (3) the cross effects of fee changes tend to be significant only for services with relatively high prices and low volumes. Une réforme du système des seuils de revenus (au delà desquels les médecins sont pénalisés) a fourni une occasion en or de mesurer l'effet des changements de revenus sur le comportement du médecin, en évitant les biais qui potentiellement vicient les résultats dérivés des séries chronologiques ou des analyses transversales. On découvre que (1) les effets de revenus des changements de rémunération sont faibles mais significatifs; (2) l'effet de revenu domine l'effet de substitution seulement pour un petit nombre de services à faible prix et fort volume; et (3) les effets croisés des changements de rémunération tendent àêtre significatifs seulement pour les services dont le prix est relativement élevé et où il y a faible volume.

Suggested Citation

  • Jasmin Kantarevic & Boris Kralj & Darrel Weinkauf, 2008. "Income effects and physician labour supply: evidence from the threshold system in Ontario," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 41(4), pages 1262-1284, November.
    • Handle: RePEc:wly:canjec:v:41:y:2008:i:4:p:1262-1284
    DOI: 10.1111/j.1540-5982.2008.00503.x
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    References listed on IDEAS

    as
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    Cited by:

    1. Bruce Shearer & Nibene Habib Somé & Bernard Fortin, 2018. "Measuring Physicians’ Response to Incentives: Evidence on Hours Worked and Multitasking," Cahiers de recherche 1809, Centre de recherche sur les risques, les enjeux économiques, et les politiques publiques.
    2. Sung-Hee Jeon & Jeremiah Hurley, 2010. "Physician Resource Planning in Canada: The Need for a Stronger Behavioural Foundation," Canadian Public Policy, University of Toronto Press, vol. 36(3), pages 359-375, September.
    3. Bernard Fortin & Nicolas Jacquemet & Bruce Shearer, 2021. "Labour supply, service intensity, and contracts: Theory and evidence on physicians," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 36(6), pages 686-702, September.
    4. Brekke, Kurt R. & Holmås, Tor Helge & Monstad, Karin & Straume, Odd Rune, 2017. "Do treatment decisions depend on physicians' financial incentives?," Journal of Public Economics, Elsevier, vol. 155(C), pages 74-92.
    5. Katherine Cuff & Jeremiath Hurley & Stuart Mestelman & Andrew Muller & Robert Nuscheler, 2007. "Public and Private Health Care Financing with Alternate Public Rationing," Department of Economics Working Papers 2007-07, McMaster University.
    6. Nibene H. Somé & Rose Anne Devlin & Nirav Mehta & Gregory S. Zaric & Sisira Sarma, 2020. "Stirring the pot: Switching from blended fee‐for‐service to blended capitation models of physician remuneration," Health Economics, John Wiley & Sons, Ltd., vol. 29(11), pages 1435-1455, November.
    7. Di Matteo, Livio & Cantarero-Prieto, David, 2018. "The Determinants of Public Health Expenditures: Comparing Canada and Spain," MPRA Paper 87800, University Library of Munich, Germany.
    8. Katherine Cuff & Jeremiah Hurley & Stuart Mestelman & Andrew Muller & Robert Nuscheler, 2012. "Public and private health‐care financing with alternate public rationing rules," Health Economics, John Wiley & Sons, Ltd., vol. 21(2), pages 83-100, February.
    9. repec:nip:nipewp:07/2015 is not listed on IDEAS
    10. Bruce Shearer & Nibene Habib Somé & Bernard Fortin, 2018. "Measuring Physicians’ Response to Incentives: Evidence on Hours Worked and Multitasking," Cahiers de recherche 1808, Chaire de recherche Industrielle Alliance sur les enjeux économiques des changements démographiques.
    11. Kantarevic, Jasmin & Kralj, Boris & Weinkauf, Darrel, 2010. "Enhanced Fee-for-Service Model and Access to Physician Services: Evidence from Family Health Groups in Ontario," IZA Discussion Papers 4862, Institute of Labor Economics (IZA).
    12. Nibene H. Somé & Bernard Fortin & Bruce Shearer, 2024. "Measuring physicians' response to incentives: Labour supply, multitasking and earnings," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 57(2), pages 622-661, May.
    13. Sara Allin & Michael Baker & Maripier Isabelle & Mark Stabile, 2015. "Accounting for the Rise in C-sections: Evidence from Population Level Data," NBER Working Papers 21022, National Bureau of Economic Research, Inc.
    14. M. Ruth Lavergne & Lindsay Hedden & Michael R. Law & Kim McGrail & Megan Ahuja & Morris Barer, 2018. "The impact of the 2008/2009 financial crisis on specialist physician activity in Canada," Health Economics, John Wiley & Sons, Ltd., vol. 27(11), pages 1859-1867, November.
    15. Zhang, Xue & Sweetman, Arthur, 2018. "Blended capitation and incentives: Fee codes inside and outside the capitated basket," Journal of Health Economics, Elsevier, vol. 60(C), pages 16-29.

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