Dundee Discussion Papers in Economics 162: The existence and nature of physician agency: evidence of stinting from the British NHS

The ability of physicians to make take-it-or-leave-it offers of treatment implies that even fully informed consumers of health care may receive treatments that they would not themselves choose. This paper examines both the extent and direction of this distortion away from patient choice the physician agency effect using a large patient-level claims-based data set for dental treatments under the British National Health Service. We nd that an increase in competition between dentists results in an increase in treatment effort when those dentists are remunerated on a fee-for-service basis, which is suggestive of stinting physician agency resulting in under-treatment relative to what patients would choose and that this effect is increases in the extent to which patients are insulated form the cost of their treatment.