Labour supply, service intensity, and contracts: Theory and evidence on physicians

Based on linked administrative and survey panel data, we analyse the labour supply behaviour of physicians who could adopt either a standard fee-for-service contract or mixed remuneration (MR) contract. Under MR, received per diem reduced fee for services provided. We present estimates structural discrete choice model that incorporates service intensity (services provided hour) into framework. use our to predict (ex ante) effects contracts physician welfare, as measured by average equivalent variations. The is under an MR contract, suggesting incentives matter. Hours spent seeing patients less sensitive than services. Our results suggest reform forcing all system would have substantially larger were observed reform. A pure salary (per diem) sharply reduce but increase time patients.