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Prescribing institutions: Explaining the evolution of physician dispensing

Published online by Cambridge University Press:  02 December 2011

KAREN EGGLESTON
KAREN EGGLESTON*
Affiliation:
Stanford University, Stanford, CA, USA
*
*Email: [email protected]
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Abstract:

Health systems provide a rich field for testing hypotheses of institutional economics. The incentive structure of current healthcare delivery systems have deep historical and cultural roots, yet must cope with rapid technological change as well as market and government failures. This paper applies the economic approach of comparative and historical institutional analysis (Aoki, 2001; Greif, 2006) to health care systems by conceptualizing physician control over dispensing revenues as a social institution. The theory developed – emphasizing the interplay between cultural beliefs, interest groups, technological change, insurance expansion and government financing – offers a plausible explanation of reforms since the 1960s separating prescribing from dispensing in societies such as Japan, South Korea, Taiwan and China. Technological change and adoption of universal coverage trigger reforms by greatly increasing the social opportunity costs of physician over-prescribing and reshaping the political economy of forces impinging on the doctor–patient relationship.

Type
Research Article
Information
Journal of Institutional Economics , Volume 8 , Issue 2 , June 2012 , pp. 247 - 270
Copyright
Copyright © The JOIE Foundation 2011

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