Essays in Health Economic

Webs of complex and often overlapping incentives characterize most modern healthcare systems. Some of these incentives have been purposely designed to influence the delivery of care to patients. Others emerge at the intersection of independent policies and decisions that accidentally create opportunities for arbitrage by providers of care. Using both administrative and survey data from Canada and exploiting institutional features associated with the provision of obstetric care, this thesis investigates how physicians respond to incentives embedded in their remuneration schemes, and explores longer-term consequences of such behaviour changes. The first chapter looks at primary care physicians' responses to a targeted bonus payment introduced to encourage the provision of low-volume intrapartum care in the province of Ontario. The results suggest that, while physicians do alter their behaviour in response to the introduction of explicit incentive payments, they may not do so by providing more of the services associated with the bonus. Instead, income effects may lead to a reduction in the provision of targeted services by eligible physicians, and influence their activities in other areas of their practice. The second chapter studies physicians' responses to subtler financial incentives: higher remuneration for procedures known to have close substitutes. Exploiting exogenous changes in the relative fee-for-service payment received by Canadian doctors for C-sections compared to vaginal deliveries, the findings from this chapter suggest that physicians do respond to such implicit incentives. The results also provide evidence that physicians' choice of birth delivery method might however be more strongly affected by spillovers from the publication of high-profile studies and trials results. The third chapter finally explores the potential long-term implications of physicians' responses to incentives in terms of patients' health outcomes. Investigating the impact of C-section birth on children's health outcomes later in life, and on their future consumption of care, it presents suggestive evidence that the association between the mode of delivery and some health conditions cannot be accounted for by a rich set of environmental and socioeconomic confounders. Overall, these three chapters suggest that financial incentives can shape physicians' behaviour, sometimes in unexpected ways, with both short- and long-term consequences.