Treatment intensity and provider remuneration: dentists in the British National Health Service

Dental service providers in the British National Health Service (NHS) operate under a number of remuneration arrangements that give rise to different incentives. We present a theoretical model of the effect of different remuneration structures on treatment intensity and test this model on data on treatments carried out in Scotland. After controlling for differences in patient need and dentist specific preferences, we find that self-employed dentists treat patients who are exempt from payment more intensively than their employed counterparts. The results imply that changes in remuneration can have a large effect on the distribution of treatments. More generally our results provide support for economic models that view financial incentives as important determinants of physician behaviour.