Physician's economic behavior: GP's expected income and effective factors

What is it about?

Physician decisions and behavior direct the resource flow in the health system and affect healthcare expenditure. There are several theories for explanation of physician decisions and behavior. According to Target Income Hypothesis(TIH) as interesting model for Physician behavior, doctors decisions about their work (hours of work, pricing, ...) mainly affected by their financial expectation(target/reference/expected income). A basic question which has not been adequately answered by the target income hypothesis, concerns how physicians specify their target income. We study this issue by a sample of Iranian GPs.

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Why is it important?

Since target income is inherently affected by the preferences and views of physicians, therefore, in the current study apart from demographic and practice variables, the factors related to GPs’ views about their economic status and target income were also included in the model. Furthermore, for probable measurement bias and the endogeneity problem the IV approach was used. The main findings include: GPs with higher economic expectations, as well as GPs dissatisfied with their current professional financial status, and GPs that had a greater willingness to save money set higher target incomes in order to respond to these expectations, to compensate their financial dissatisfaction, and to address the economic instability and financial risk of their practice.

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