Agency in health-care: are medical care-givers perfect agents?

Abstract

It has been suggested in the literature that a source of incompleteness in the agency relationship between the doctor and the patient is that the provider may respond to an incomplete or biased perception of the patient's interests. However, this has not been shown empirically. This article is novel in presenting an empirical test of the fundamental assumption of the agency model that health-care professionals understand what their patients want. Discrete choice experiments (DCEs) are conducted simultaneously within samples of patients (women who gave birth) and care-givers (doctors and nurses), to elicit and contrast patients' authentic preferences (for five maternity ward attributes) with what care-givers believe them to be. Conclusion: agents have a biased perception of principals' preferences, and therefore a complete agency relationship does not exist. Our findings add a novel empirical contribution to the agency relationship literature. Moreover, parallel preference patterns of patients and care-givers are certainly of much interest to the field of health economics: Informing the unaware medical care-givers about the patients' preferences, will improve treatment and patients' satisfaction.

Notes

¹ There are also other possible sources of imperfection of the agency relationship in health care, such as physician-induced demand (e.g. Ganyor, 1994; Calcott, 1999) or, the doctor serving as an agent of both the patient and the hospital, maximizing the utility of the former and the profits of the latter (Lundback, 1997).

² In most agency health-care studies the doctor-patient relationship has been examined and therefore only the doctor was defined as the agent. Nurses are the primary care-givers in maternity wards and they also act as agents.

³ DCEs have been developed in Mathematical Psychology (e.g. Luce and Tukey, 1964). Applications in health have been relatively recent, with papers dating from the early 1990s (Ryan and Gerard, 2003). Ben-Akiva and Lerman (1985) provide a comprehensive review of the design and analysis of DCEs.

⁴ As there are two attributes with three levels each and the rest three attributes have two levels each.

⁵ Israel has a public health-care system. Few women give birth at home or in private maternity wards.

⁶ It is recognized in the literature that interviews are the most effective and appropriate means for DECs, although they are rarely used, due to their high costs. Postal questionnaires are regularly used.