On the role of personality traits in shaping responses to physician payment systems

Abstract We study the interplay of extrinsic and intrinsic motivations regarding the quality of care physicians provide. In particular, we analyze the role of personality traits in explaining the heterogeneity in responses to common physician payment systems. We utilize data from several behavioral experiments (659 subjects) on physician payment systems and from post-experimental surveys on personality traits. The experiments use equivalent health framings and decision situations with either fee-for-service (FFS) or capitation (CAP) as baseline payments. Blended payment systems—performance pay and mixed systems—are introduced at a within-subject level to complement the baseline payments. We find that personality traits contribute to explaining some heterogeneity in behavioral responses to payment incentives. Under baseline systems, more agreeable individuals provide higher quality of care. Blended payment systems enhance the aggregate treatment quality. Nevertheless, we observe a moderation effect in CAP-based blended systems: by Conscientiousness in mixed schemes, and by Conscientiousness and Agreeableness under performance pay. Quality increases are smaller for individuals higher in these traits. The moderation can be mainly explained by a ceiling effect, though we also observe a quality reduction/crowding-out effect. Our findings emphasize the importance of the interplay between financial incentives, physician provision behavior, and personality traits and inform the discussion on the design of tailored physician payment systems.