Resource scarcity and prioritization decisions in medical care: A lab experiment with heterogeneous patient types

• Published in: Health economics Vol. 30; no. 2; pp. 470 - 477
• Main Authors: Brendel, Franziska, Einhaus, Lisa, Then, Franziska
• Format: Journal Article
• Language: English
• Published: Hoboken, NJ Wiley 01.02.2021; Wiley Periodicals Inc
• Subjects: Behavior change; Budget constraint; Budgets; Budgets - organization & administration; Capitation; COVID-19; COVID-19 - epidemiology; Efficiency, Organizational; Financial support; Government spending; Health behavior; Health care; Health Care Rationing - economics; Health Care Rationing - organization & administration; Health economics; Health Equity - economics; Humans; laboratory experiment; Models, Theoretical; Pandemics; Patients; physician behavior; Physicians; Physicians - economics; prioritization; Profits; Resource allocation; resource scarcity; SARS-CoV-2; Scarcity; Severity of Illness Index; social preferences; resource scarcity; physician behavior; social preferences; laboratory experiment; prioritization
• ISSN: 1099-1050; 1057-9230; 1099-1050
• DOI: 10.1002/hec.4192

During the COVID-19 pandemic, health care systems around the world have received additional funding, while at other times, financial support has been lowered to consolidate public spending. Such budget changes likely affect provision behavior in health care. We study how different degrees of resource scarcity affect medical service provision and, in consequence, patients' health. In a controlled lab environment, physicians are paid by capitation and allocate limited resources to several patients. This implies a trade-off between physicians' profits and patients' health benefits. We vary levels of resource scarcity and patient characteristics systematically and observe that most subjects in the role of physician devote a relatively stable share of budget to patient treatment, implying that they provide fewer services when they face more severe budget constraints. Average patient benefits decrease in proportion to physician budgets. The majority of subjects chooses an allocation that leads to equal patient benefits as opposed to allocating resources efficiently.