Effects of financial incentives on physicians' specialty and location decisions

Abstract

Available information is reviewed on the effects of financial incentives on physicians' specialty and location decisions. Income of physicians varies by specialty and geographic area, but evidence is limited on the effects of these differences on career decisions. Only two studies have been done on the relationship of income to specialty choice. These studies showed that the impact of income on specialty choice, if any, is weak. Studies on the relationship of both reimbursement levels and income to physician location choice generally concluded that there is a small, positive correlation between these financial factors and physician density. Thus, increasing physicians' income appears to be viable public policy for attracting physicians to underserved areas. Though rough estimates are calculated of the cost of attracting additional physicians, based on studies reviewed, conclusions on costs of incentive programs are premature.