Professional norms, public service motivation and economic incentives
What motivates public employees?
Lotte Bøgh Andersen, University of Aarhus, paper for Study Group III, EGPA 2007
Abstract
The theories of professions, public service motivation, and economic incentives explain the
behaviour of the producers of publicly financed services differently. They emphasize professional
norms, sector, and economic incentives, respectively. The few existing attempts to integrate these
theories have, however, indicated that these factors interact. Using interviews, surveys and registers,
the paper investigated how professional norms, economic incentives and sector affected the
behaviour of Danish dentists and physicians. It was found that when strong professional norms
existed, economic incentives were unimportant for both public and private employees. In contrast,
when no firm professional norm applied, economic incentives affected behaviour. Controlling for
different economic incentives, sector does not seem to affect the behaviour much. The results imply
that the economic and professional perspectives should be combined in the analysis of behaviour
among health professionals.
Introduction
The motivation of the producers of publicly financed services is important due to its major
consequences for the quality and costs of the services. If general practitioners reduce visits, and if
hospital physicians try to limit their time with the patients, the quality of services suffers. Likewise,
the costs of the services accelerate, if private dentists only think about fees, and if public dentists
systematically try to maximize their budgets. Simple economic incentive theory would expect this.
Fortunately, the producers of publicly financed services are not only motivated by leisure and
remuneration. There is, however, little consensus on the contents and causes of non-economic
motivation.
In the literature on public service motivation (PSM), it has been argued that motivation
depends on the sector. Specifically, public employees are expected to have more altruistic motives
than private employees (Rainey 1982; Perry and Wise 1990; Crewson 1997). In other words, PSM
expects motivation (and therefore behaviour) to differ between sectors (Wright 2001). In contrast,
the sociology of professions (Mosher 1968; Roberts & Dietrich 1999; Freidson 2001) argues that
the relevant values (professional norms) are developed and sanctioned within the occupation.
Professionals from the same occupation are expected to share motivation regardless of sector. The
PSM and the sociology of professions thus disagree about the relative importance of sector and
occupation, but both are value-oriented departures from the simple economic incentive theory.
1
However, economic incentives cannot be totally dismissed. Under some circumstances
financial incentives can induce public employees to increase their work effort (Burgess, Propper &
Wilson 2002; Meier & O´Toole 2002). For example, health care professionals produce more when
they are paid on fee-for-service rather than on a fixed salary basis (Krasnik, Groenewegen, Pedersen
et al. 1990; Donaldson & Gerard 1993; Taylor-Gooby, Sylvester, Calnan et al. 2000; Gosden,
Forlan, Kristiansen et al. 2001). This indicates that more than one type of motivation is important.
Thus, the interesting issue is how economic, professional, and public service motives interact.
Few attempts have been made to integrate the findings from the PSM, the sociology of
professions and the economic incentive theory. Investigating cesarean section surgeries in hospitals
with different ownership structures, Goodrick and Salancik (1996) found that economic incentives –
for both public and private employees – are unimportant when strong professional standards are in
place. In contrast, when no firm professional norm applies, they found that economic incentives
affect behaviour. These findings are very interesting, but we need more empirical evidence to
determine the general relationships between behaviour and different types of motives. This paper
investigates how professional norms, economic incentives and sector affect the behaviour of Danish
health care producers.
Differentiating between situations with and without professional norms within the same
occupations, the paper investigates the motives and behaviour of dentists and physicians from the
private and the public sector. I have interviewed public physicians with and without incentives to
increase the production, and the incentives to induce demand also varied between the interviewed
private physicians due to their different list sizes. The interviewed private dentists had an incentive
to prefer treatment over prevention, while this choice did not have economic consequences for the
interviewed public dentists. In addition to the qualitative interviews, a survey of dental workers has
been conducted. In both interviews and survey, the health care producers were asked about services
governed by firm professional norms and services without professional norms. The interviews and
the survey provide good descriptions of norms and motives, but the results cannot be generalized
statistically, and the action indicators are rather subjective. This calls for more general, objective
indicators.
Fortunately, health care registers cover the entire Danish population and contain information
about both treatments and prevention. This enables me to analyze how the motivational differences
identified in the interviews affect behaviour. The register analysis differentiates between private and
public employees, between producers with different economic incentives, and between services
with and without firm professional norms. The paper thus brings all three theories into play.
After a discussion of the three theories, the paper puts forward its theoretical model of
motivation and behaviour and proposes six hypotheses. Next, it presents the research design and
methods. The analysis is structured around the hypotheses. Finally, the paper discusses the findings
and draws conclusions.
2
Theoretical framework
Publicly financed services are often characterized by output and outcome which is difficult to
observe (Wilson, 1989). At the same time, the line of command is seldom simple, and each public
employee must often satisfy multiple principals (Miller, 2005). If public employees only tried to
increase their remuneration and decrease their workload, we would expect a serious agency loss
(ibid.). Other selfish motives (e.g. budget maximization (Niskanen, 1971) and bureau shaping
(Dunleavy, 1991)) have been suggested, but these motives can hardly stand also. Public employees
probably have, like Downs (1961) claimed more than 40 years ago, have both selfish and unselfish
motives – and the mixture might vary from situation to situation.
Although studies of public sector employees’ motivation are plentiful (Wright 2001), no
consensus exists on this mixture between selfish and unselfish motivation – or as Le Grand (2003)
would say – between the situations in which public employees are knight and knaves. The literature
on public service motivation (PSM) has tested whether public employees have a special motivation
(different from private employees), but the concept of ‘public service motivation’ is not
unequivocal in the literature. Rainey (1982) equates PSM with a wish to ‘engage in meaningful
public service’. Crewson (1997) defines PSM as intrinsic work attributes like a sense of usefulness
to society and a wish to help others. Gabris and Simo (1995: 35) conceive PSM as a ‘strive to
harness the technical efficiency of bureaucratic organization for the purpose of advancing
democratic values’. Perry and Wise (1990) seek to clarify the nature of Public Service Motivation
and argue that PSM may be grounded in three ways: Rationally, affectively and based on norms.
The rationally motivated public sector employee is drawn to government to make good policies or
to advocate for special interests. The affectively motivated public employee personally identifies
with a public program and is genuinely convinced of its social importance. Finally, PSM may be
conceived as a norm-based desire to serve the public interest or as a sense of loyalty to duty and
government. Despite the different understandings of PSM, most of the literature agrees that PSM
exists in the public sector, and that higher levels of PSM are found in the public sector than in the
private sector (Wright 2001). Public sector employees are – or consider themselves to be –
committed to provide good and adequate service to the community and their clients (Steele 1999;
Graham & Steele 2001; Vrangbæk 2003). This may also be the case when the aim of providing
adequate and high quality services conflicts with budgetary constraints (Crilly & Le Grand 2004).
In this sense, public employees are knights (Le Grand, 2003).
3
This does not, however, mean that financial rewards for performance do not affect public
employees. Perry and Wise (1990) write that ‘public organizations that attract members with high
levels of PSM are likely to be less dependent on utilitarian incentives to manage individual
performance effectively’ (Perry & Wise 1990: 371). This is based on Rainey’s (1982) comparison
of public and private managers, where public managers perceived the relationship between
performance and extrinsic rewards to be weaker than private managers did. However, Rainey
(1982: 297) cautions that financial rewards are also highly valued by many public employees. Even
though Crewson (1997) concludes that public employees are less likely than private to be driven by
financial rewards, his empirical findings do not indicate that there is a significant difference
between public and private sector employees’ wish for higher pay. In fact, his results show that
wages are a very important motivator for eight of ten employees, both in the public and private
sectors. Gabris and Simo (1995), who criticize the notion of PSM, also find that wages are an
equally strong motivation for public and private sector employees. Based on a score of articles
Perry (1988) concludes that employees are motivated by the merit pay system. Merit pay has,
however, failed to establish a clear link between pay and performance, and it has not improved the
performance of government agencies.
Contrary to this evidence, other studies show that financial incentives induce public
employees to increase their work effort (Burgess, Propper & Wilson 2002) and that higher paid
public employees produce better organizational outcome (Meier & O´Toole 2002). Specifically, a
number of health care personnel studies suggest that these employees produce more when they are
paid on fee-for-service rather than on a fixed salary basis (Krasnik, Groenewegen, Pedersen et al.
1990; Donaldson & Gerard 1993; Taylor-Gooby, Sylvester, Calnan et al. 2000; Gosden, Forlan,
Kristiansen et al. 2001). Still, under certain circumstances financial incentives seem to be totally
unrelated to the behaviour of health care employees in one particular case: When strong
professional norms prescribe a given behaviour.
Professional norms are prescriptions commonly known and used by the members of an
occupation. These prescriptions refer to which actions are required, prohibited or permitted in
specific situation (Andersen, 2005: 71-73; Ostrom 1986: 4). The existence of such norms is a vital
part being a profession. Although the sociology of professions has reached agreement on one
definition, most of the literature (e.g. Freidson, 2001; Robert & Dietrich, 1999; Goode 1969) agrees
that a profession (at least) has a specialized theoretical knowledge and strong professional norms
(Andersen, 2005: 22). The theoretical connection between these two variables can be modelled as
4
follows (the argument draws on Andersen, 2005: 22-31): Assuming that some services require a
special expertise, an asymmetry in information between providers (the relevant occupation with this
expertise) and users of these services exists. It is hardly controversial to claim that if the expertise is
based on specialized knowledge, this asymmetry increases, and the same is probably the case for
theoretical knowledge, because such knowledge cannot be codified and thereby controlled
(Freidson, 2001). Especially if significant externalities are involved in the transactions, broader
social constraints are warranted on the behaviour of the relevant occupation (Roberts & Dietrich
1999: 989). The public can accomplish this by entering into a professionalism contract with the
occupation which thereby gains professional status (recognition of their knowledge and high
standards/norms). In such an implicit bargain, the profession promises to keep their house in order,
that is, to uphold a certain standard. In return, the profession can enjoy a higher status and receives
higher pecuniary rewards (Day og Klein 1987:19; Watson, 2003: 192). Still, the profession (as a
collective actor) must uphold the promised standards. Despite the information asymmetry, an
occupation can hardly keep its status in the long run if sloppy practices are widespread. Individual
professionals must therefore provide proper services (as promised in the implicit contract). But why
should the individuals contribute to the professional status, which is a collective good (Olson 1965:
14) as any member of the profession consumes it, and it cannot feasibly be with held from any of
the professionals. Therefore, the profession enforces a number of formal and informal professional
norms, and the urge to do a job creditably in the eyes of one’s professional peer (Miller 2000: 307)
is expected to be a very strong determinant for behaviour.
This argument (and the sociology of professions in general) explains why financial
incentives seem to be totally unrelated to the behaviour of health care employees, when strong
professional norms prescribe a given behaviour. This seem to be the case for individual behaviour
(Andersen & Blegvad 2006) as well as for health care provider institution activities (Goodrick &
Salancik 1996). This does not, however, imply that sector and incentives cannot also be important
for behaviour. Instead of taking side, the paper claims that both sector, economic and professional
incentives play a role. The relevant literatures (Public Service Motivation, economic theory for
example in the form of Principal Agent models and the sociology of professions) have lived
separate lives, but the last decade has seen several attempts to integrate the findings (Le Grand
2003; Brehm and Gates 1999; Miller & Whitford 2007). The increased interest in non-economic
types of motivations (e.g. Brehm and Gates 1999) is related to the puzzling rarity of economic
incentive contracts in the public sector. This might be due to low efficacy of the agents (Miller &
5
Whitford 2007), measurement problems (Wilson 1989: 159) or team production externalities
(Miller 1992 & 2000), but it might also reflect that economic incentives do not matter that much
compared to other types of motivation.
Hypotheses
In order to integrate the literatures, we need specific expectations about the relationship between
sector, financial incentives and professional norms. Based on existing studies of professionalised
services (Andersen & Blegvad, 2006; Iversen & Lurås, 2000; Goodrick & Salancik, 1996), the
paper suggests that professional norms (if they exist) are always important, while incentives are
importance if no professional norm dictates behaviour. Depending on the conceptionalization of the
public and private sectors, the paper expects public employees to differ (at least in motivation) from
public employees. Further, based on the Public Service Motivation literature (Rainey 1982; Perry
and Wise 1990; Crewson 1997) I expect that economic incentives matter more in the private sector
(compared to the public sector), and that more (and stronger) performance-related financial
incentives exist in the private sector. Figure 1 illustrates these causal expectations.
Figure 1: Theoretical model
Professional norms
Financial incentives
Behavior
Sector
The next issue is how this theoretical model can be tested. Utilizing the fact that professional norms
only exist for part of the behavior (even for occupations with a high degree of professionalism) this
paper analyzes the behavior of public and private dentists and physicians in situations with and
without professional norms. Further, these health care providers have different financial incentives,
and this enables us to test the relative importance of and the interaction between sector, economic
incentives and professional norms.
Specifically, Danish dentists face widely different financial incentives regarding their choice
between prevention and treatment of children’s caries. Some dentists are rewarded highly for
making fillings and poorly for using preventive measures, while the remuneration of others is
independent of this choice. As no professional norm regulates the use of fissure sealings (lacquer
sealing of the masticating surfaces), the use of this measure is expected to depend on the incentives.
6
Hypothesis 1: Dentists for whom prevention is not lucrative use fewer fissure sealings
compared to dentists whose choice of treatment is not linked to their remuneration
The obvious objection is, however, that exactly private dentists are paid on a fee-per-item basis (per
filling for example) while public dentists get a fixed salary. In Denmark, some municipalities
contract with public dentists concerning the delivery of child dental care, while other municipalities
employ their own dentists. Anyhow, the services are free of charge for the children. As sector and
type of economic incentive co-vary perfectly, this part of the research design is indeterminate with
regard to the relative strength of sector compared to incentives. This is often the case as incentives
are far more widespread in the private sector compared to the public sector. Still, the test of
hypothesis 1 tells us whether the chain illustrated below (which is part of the theoretical model) is
plausible.
Figure 2: Illustration of the claim in hypothesis 1
Sector
Financial incentives
(H1: to more use
treatment and less
prevention)
Behavior
(H1: actual use of fissure sealings)
To see whether economic incentives affect behaviour or whether the differences are only due to the
different sector affiliation, we need to hold the sector constant (and vary the incentive). Studies of
public hospital doctors and private GPs (general practitioners) in Denmark enable us to do that.
First, we can test whether public doctors working in a ward, where an organizational incentive to
maximize production was introduced (the budget of the ward per operation became dependent on
the number of operations) differs from the behaviour of public doctors without such an incentive.
This should be especially pronounced for services such as hip operations where the waiting lists are
always long. The incentive is collective (at the ward level) and the test of its effects on individual
behaviour is thus conservative. Second, the literature on supplier-induced demand (Evans 1974;
Richardson & Peacock 2006; Serritzlew & Andersen, 2006) claims that GPs with a short list have a
stronger incentive to increase the number of services per patient, especially time consuming, well
paid services. In the Danish GP system, which combines per capital payment (25 % of the average
income of GP) with fee per item (the remaining 75 %), the talk therapy consultation is such a
service. Thus, the effect of incentives on behavior can be tested in two hypotheses which are also
illustrated in figure 3.
Hypotheses 2: A public doctor whose ward is paid per operation produces more hip operations
than a public doctor whose ward is not paid per operation.
Hypothesis 3: There is a negative relationship between the number of therapy consultations
per patient and the number of listed patients per GP.
7
Figure 3: Illustration of the claim in hypothesis 2 and 3
Financial incentives
(H2: Pay per operation or not)
(H3: Number of patients on list)
Behavior
(H2: Number of therapy consultations)
(H3: Number of hip operations)
Adding the professional norms to the model, we need to compare services with and without
professional norms. Such services clearly exist for both GPs (Serritzlew & Andersen, 2006) and
dentists (Andersen & Blegvad, 2002). According to six qualitative interviews with GPs, no
professional norm regulates the use of the before-mentioned talk theory (tested in hypothesis 2),
while a firm norm requires that the GP must give some kind of service if a patient makes a contact.
Thus, the total number of services per patient is not expected to depend on the number of patient on
the list. This is tested in hypothesis 4 which concern only private employees (all GPs are private in
Denmark). Hypothesis 5 supplements this with a test of both private and public employees. For
preventive services with strong professional norms (e.g. instruction in good tooth brushing habits) I
expect neither sector nor economic incentives to matter: Everybody is expected to comply with the
professional norm.
Hypothesis 4: Dentists give tooth brush instruction regardless of their incentives and sector.
Hypothesis 5: There is no relationship between the total number of consultations per patient
and the number of listed patients per GP.
Figure 4: Illustration of the claim in hypothesis 4 and 5
Professional norms
(H4: Give service if contact)
(H5: Use tooth brush instruction)
Financial incentives
(H4: Induce demand if short list)
(H5: Cut down prevention if not lucrative)
Behavior
(H4: Total number of
consultations per patient)
(H5: Actual use of tooth
brush instruction)
Sector
(H4: Only private)
(H5: Private and public)
The last hypothesis concerns the direct relationship between sector and behavior. As the PSM
literature primary talk about motivation, it would be interesting to compare the subjective account
about motivation, the perceived differences between the public and private sectors and the reasons
for choosing the private and the public sector, respectively. Although an association between sector
and motivation does not necessarily have behavioral implications, it is interesting none the less.
Using the Crewson (1997) conceptualization of PSM, the hypothesis is:
Hypothesis 6: Public health care professional are more often than private health care
professionals motivated by sense of usefulness to society and a wish to help others, whereas
private health care professionals are more often motivated by pecuniary motives.
Data and methods
The research design combines many data sources in order to test the theoretical model. For practical
reasons, all the data are from Denmark, but the causal relationships are expected to be general. The
paper is predominantly based on statistical analysis of register data, but I also included qualitative
interviews and a survey. The two most important registers are the Danish Odontological Register
(DOR) and the Danish Health Insurance Register (DHIR). Additionally, I use a lot of register
information to control for spuriousness etc., but this paper will focus on the causal relationships in
the hypothesis and the used control variables will not be commented on (of course, all the analyses
include the relevant controls).
The Danish Odontological Register contains data on dental health and the most important
measures used for all individual Danish children. Each time, a child receives dental services, the
dentist fill in a registration form which is scanned into the register. As we have registered for each
child whether he or she attended a private or a public dentist, the units of analysis are the individual
children. As indicated in hypothesis 1, the paper focuses on fissure sealings, but differences in the
dental health measured as the average number of caries infected tooth surfaces in the permanent
teeth are also of interest as an indirect indicator of behavior.
The Danish Health Insurance Register contains the number and type of services provided by
GPs. Based on this register, we investigated services provided in April and May 2006 in the County
of Aarhus. As the incentives vary for different GP practices (depending on the number of listed
patients), the units of analysis were 257 practices. For the group practices, the number of patients
was divided by the number of GPs working in the practice. We investigated only day-time services,
because patients visit different doctors at night. The total number of base services per listed patient
is an example of a measure strongly governed by professional norms: If a patient contacts the GP,
the standards within the occupation say that he must give a service. But the standards do not always
prescribe which service the GP must choose. Especially if the patient has social or psychological
problems, the GP can freely choose between cognitive therapy and the ordinary consultation (which
might lead to a referral to a specialist).
To supplement the register information, I conducted a post delivered survey (together with
dentist Marianne Blegvad) with employees in the county of Ringkjøbing (n=186). The
questionnaire asks if the employees used a number of preventive measures. Some of these measures
were regulated by professional norms, while others were not.
Finally, I conducted 18 semi-structured interviews with health care professionals: 6
interviews with GPs with varying numbers of patients on their lists, 3 interviews with private
dentists, 3 interviews with public dentists, 3 interviews with hospital doctor with incentives to
increase productions, and 3 interviews with hospital doctors who had no such incentive. The
interviews are analyzed, using NVivo 7 (the categories from the focused coding can be seen in the
appendix). Firstly, I use the interviews both to see, how the health care professionals perceive their
own motivation and behaviour. Secondly, the interviews helped me find out which services are
lucrative and which are not. Finally, the interviews are part of the investigation of the professional
norms in the profession. The other parts of this investigation were three elite interviews and
analyses of textbooks from the relevant educations.
Results
The first hypothesis claims that dentists for whom prevention is not lucrative use fewer fissure
sealings compared to dentists whose choice of treatment is not linked to their remuneration. In the
Danish context, this means that we expect private providers of publicly financed dental care for
children to provide significantly fewer fissure sealing per child than public providers of the same
services (the municipalities choose whether they will use private or public dentists). The test is
conservative in the sense that the municipalities with private providers face slightly worse initial
dental care (due to lower average fluoride contents in the drinking water and lower level of
education in the population). This should, ceteris paribus, lead to a higher use of fissure sealing. If
the results thus show that fissure sealings are used less, we can be more certain that it is due to the
difference between the providers.
The hypothesis tests whether economic incentives or/and sector matters for health care
professional when no firm professional norm applies. The most reliable measure is the register data
on fissure sealings. Table 1 shows that children attending public dentists get twice as many fissure
sealings compared to children attending private dentists.
Table 1: Pooled analysis (1996-2001) for fissure sealings and ownership form
Private
Public
Difference
0.76
(n=37,513)
1.59
(n=278,322)
-0.83
12-year-olds: Average number of
fissure sealings on the 6’s and 7’s
1.02 (n=34,833) 2.14 (n=255,347)
-1.12
15-year-olds: Average number of
fissure sealings on the 6’s and 7’s
Source: Andersen & Blegvad (2002: 43)
Significance
p<0.0005
p< 0.0005
The survey of dental workers and the semi-structured interviews show the same tendency: 93% of
the public employees with assess to a fissure sealing apparatus (n=50) used it, the corresponding
proportion of private dental workers (n=22) was only 78%. Even though the Municipality of
Ringkøbing demands that all children receive fissure treatment, only one of the interviewed private
dentists used it systematically. One private dentist did not use it at all, while another used it on
indication. Explaining his behaviour, the dentist who did not use fissure sealing referred directly to
the (lacking) norm in this area. All the interviewed public-sector dentists used fissure sealing
systematically. Thus, all three data sources (register data on individual children, employee survey
and interviews) confirm that private dental workers use much less fissure sealing than public dental
workers. This confirms hypothesis 1, but we cannot determine whether this is due to the different
sector or the different economic incentives. We thus turn to the hypothesis 2 and 3 which test
whether economic incentives affect behaviour within the public and private sector.
Hypotheses claims that public doctors whose ward is paid per operation produce more hip
operations than public doctors whose ward is not paid per operation. This hypothesis is much harder
to test than hypothesis 1: Hospital services are much more complex than fissure sealings of teeth.
Comparing a ward where an incentive was introduced to a ward without incentive to increase
production, we can explore how the orthopaedists themselves talk about their motivation and
actions, and we can use the growth in the number of surgeries as a rough validation of the
interviews. Still, the incentive, if any, is weak and collective. One of the interviewees expresses it
thus: “When we increase activity, it trickles from the region to the hospital and to the ward”. The
interviews also show that the interviewees generally do not think much about the budgetary
dependence on production. Still, the orthopaedists from the ward with the incentive seem to pay a
little more attention to the production than the other orthopaedists. A couple of quotations illustrate
the point.
Everybody say that economic incentives do not matter, and I do not think that it is
correct….doctors often put themselves on at a pedestal, shouting that their patient must
have the best, no matter what it costs. This is, I think, unrealistic in this system
(orthopaedist in the ward with production incentive)
We make lots of surgeries which are economically irresponsible, because the payment –
diagnose related groups – is based on a standard patient, and only a little part get through
to the ward (orthopaedist in the ward without/with very little production incentive)
As shown in figure 5, both wards increased their production between 2003 and 2005 (where more
activity based incentives were introduced), but the different growth should be very carefully
interpreted due to the small number of cases and the complex character of the service.
Figure 5: The growth in the number of surgeries at two Danish hospital wards with varying
incentives to increase production. 2003-2005.
250%
Index (2003=100)
200%
With incentives
150%
Without incentives
100%
50%
2003
2004
2005
Year
In order to test the effect of economic incentives for a less complex service, we now turn to the
general practitioner whose rather standardized services are typically produced by one person. Some
of these services are not regulated by professional norms, and the use of these services is expected
to depend on the economic incentives of the GP. The Danish list system where each GP has a list of
patient who must attend him (for day time services) allows us to compare the number of services
delivered per patient. As an implication of the Supplier Induced Demand literature, hypothesis 3
expects a negative relationship between the number of therapy consultations per patient and the
number of listed patients per GP. In this test, the list size is a proxy for the economic incentive of
the GP to induce demand. An alternative proxy could be whether the practice is open for more
patients (that is, the GP wants more patient). Table 2 shows the result of a multivariate regression
(the socio-democratic characteristics of the patients were included and had no effect).
Table 2: Regression analyses of the number of talk therapies pr. 100 patients in April and May 2006
(OLS). Unstandardized regression coefficients.
Multivariate model
Constant
3.4
Number of patients per GP (list size)
-0.00065 ***
Open practice
-0.0054
Average age of the GPs
-0.024 **
R2
0.065
N
257
Note: * p<0.10 ** p<0.05 *** p<0.01. Analyses with the 19 practices which did
not use cognitive therapy in the investigated two month show similar results.
The regression does, as expected, show a negative correlation between the number of patients and
the use of talk therapy. This indicates that economic incentives, at least for services without
professional norms produced in the private sector, do affect behaviour. But as many health care
services are regulated by professional norms, we need to turn to these services.
The firmness of professional norms should be seen as a continuum from no norm to a very
firm norm. Within the dental profession, a very firm norm says that children (especially in high risk
groups) must have brush instruction. Accordingly, hypothesis 4 expects that all dentists (regardless
of their incentives and sector) give tooth brush instruction. Table 3 indicates that this is true. It
shows the percentage of public and private dental workers who uses a number of preventive
measures (including brush instruction) to normal and high risk children.
Table 3: Percentage of clinical personnel in private and public dental care who give high-risk and
average children brush instruction.
Percentage giving brush
For high-risk
For average children
instruction
children
Public sector
95% (n=114)
89% (n=114)
Private sector
86% (n=44)
77% (n=44)
Source: Andersen & Blegvad 2002, 41
The data implies that almost every dental worker uses the measure for high risk children, and that
this is true for both public and private dentists. The proportion using the measure for average
children is a little lower, which should be expected as the text books and elite interviews show that
the norm is strongest for high-risk children. Further, private dental workers seem to use the measure
a little less than public employees. This difference is not (unlike for fissure sealings) statistically
significant. If we look at the relative incidence of caries among children attending dentists from the
two sectors, these statistics also indicate that the behaviour related to the most important preventive
measures are rather similar: The two groups have almost equal dental health. The only difference (if
any – it is not statistically difference, although consistent over time) is that the children with much
caries tend to have even more in the private solution: The percentage of children without caries is
exactly the same (Andersen & Blegvad, 2006). This indicates that if strong professional norms
apply, neither sector nor economic incentives can overrule the norm.
A similar test (of the claim that economic incentives do not affect behaviour if firm
professional norms apply) is performed for GP in hypothesis 5. Whereas the list size was expected
to affect behaviour for a service without professional norms (talk therapy), no such association
should exist if a norm regulates the behaviour. This should be the case for the total number of
services – a GP must give some kind of service if his patients contact him. Table 4 shows that no
statistically significant relation exists between the list size and the number of base services
(different kinds of consultations).
Table 4: Regression analyses of the number of base services pr. 100 patients in April and May 2006
(OLS). Unstandardized regression coefficients.
Multivariate model
Constant
124
Number of patients per GP (list size)
-0.0013
Open praxis
1.1
Average age of the GPs
-0.31
2
R
0.0093
N
257
Note: * p<0.10 ** p<0.05 *** p<0.01.
So far, we have analyzed behaviour in different situations, utilizing different measures. We now
turn to the concept of motivation to test the last hypothesis, which says that public health care
professional are more often than private health care professionals motivated by sense of usefulness
to society and a wish to help others, whereas private health care professionals are more often
motivated by pecuniary motives. Generally, it cannot be confirmed. The public employees talk a lot
about the high wages in the private sector and about their private colleagues being motivated by
pecuniary motives, but the private interviewees talk just as much about the patients and doing good
as the public interviewees. Further, many of the (private) GPs mention that they try to maximize
public value for patient as well as for society. Doing things right according to the standards within
the profession and having interesting tasks play a bigger role for the interviewed professionals, at
least according to themselves. They might twist the truth a little bit to place themselves in a
favourable light, but no difference in motivation can be identified based on the interviews.
Discussion
The fact that both private and public health professional only seem to be motivated by pecuniary
motives to a small degree – when no firm norms apply – is probably due to the fact that they are
professionals. Occupational norms are a defining characteristic of professions, and the design does,
in this respect, represent a least likely case for the association between sector, economic incentives
and behaviour. Even for the professionals, economic incentives affect behaviour sometimes, and
sector thus often has an indirect effect because different (often more performance related)
incentives exist in the private sector. This conditional effect of economic incentives agrees with
many of the findings in the literature (Goodrick & Salancik 1996; Iversen & Lurås 2000; Brehm &
Gates 1997).
Professional norms (if they exist) appear to be the stronger motive for physicians and
dentists in their daily work, and as many of the core functions of many welfare states are performed
by professionals, this is an important message. Physicians and dentists do, however, have very high
professional status, and most public sector occupations are between the extremes of this high status
and no status at all. It is therefore most relevant whether the findings can be generalized to other
occupations. They can hardly be transferred directly: As the strength of the professional norms
decrease, economic and sector probably have stronger effects on behaviour. But the findings
indicate that professional norms, as well as economic incentives and sector, are important for
behaviour.
The presented evidence is Danish, thus holding contextual factors such as the type of the
health care system constant. Although it should be tested in a comparative study, there is no reason
to believe that the causal mechanism should be fundamentally different in other countries. The
medical and dental professionals are, to a high degree, global, and many professional norms are
based on international, scientific evidence. Still, the high levels of social capital in Denmark
(Bjørnskov & Svendsen 2002) might increase the importance of professional norms as the main
element in social capital (the level of trust) can be seen as a necessary condition for professionalism
contracts to develop. This trust goes both ways: The professionals must trust that they will be
rewarded in term of status and recognition, and the public must trust the professionals to keep their
part of the deal – to uphold a minimum standard of the services.
Conclusion
The question in this paper is how professional norms, economic incentives and sector affect the
behaviour of Danish health care producers. This was made more specific by testing five hypotheses
about motives and behaviour. First, we found that dentists for whom prevention is not lucrative use
fewer fissure sealings compared to dentists whose choice of treatment is not linked to their
remuneration. This indicates that economic incentives (and the sector behind the differences in
incentives) can affect behavior if no professional norm applies. Holding the sector constant, the next
two analyses also showed (small) effects of the incentives: The negative association between the
number of therapy consultations per patient and the number of listed patients per GP indicates that
GPs with short list (and therefore an incentive to induce demand) do in fact give more services, and
public doctors whose ward was paid per operation seemed to care more about production. Still, hip
operations showed to be a too complex service to directly test the association between incentives
and production.
The abovementioned decisions are not governed by professional norms. Talk therapy and
fissure sealing were not at the time of investigation accepted in the professions, and although a
norm regulates whether a patient should have a new hip, it does not say how many hips a doctor
should produce. Some services are, however, governed by professional norms. A norm requires that
the GPs give some service if a patient contacts them (their discretion lies in the choice of service),
and dental workers are required to instruct in tooth brushing. As expected, neither sector nor
economic incentives matter in these situations.
Professional norms thus almost dictate the behaviour of Danish health care professionals at
some areas, and if a firm norm exists, members of the same occupation – with different incentives –
behave similarly in the private and public sector. But not all behaviour is regulated by such norms.
If no firm professional norm applies, economic incentives play role. Whether sector matters, is
more difficult to say based on the evidence in this article. While the public sector interviewees
clearly think that money matters more in the private sector, no clear sector effect can be identified.
This can, however, be due to the research design – and to general high correlation between sector
and incentives which makes it difficult to separate the two factors.
Still, as incentives have been shown to matter in analyses holding the sector constant, the
main conclusion of the paper is: If a firm professional norm exists, it dominates the behaviour of
health care professional, but if no such norm applies, economic incentives also matter.
Much does, however, remain to be done: This paper has shown the importance of
professional norms for the ‘most likely case’ for this to have an effect. Further research should
investigate occupations with less professional status, and another step might be to investigate the
role of professional norms in a county with low social capital.
Appendix
Table A1: Categories and sub-categories from the analysis of semi-structured interviews
Main category
Subcategories (if any)
Motivation
Autonomy
Exciting tasks
Research
Leisure
Career
Colleges
Patients
Money
Professional norms
Sanctioning of norms
Norms within the medical specialty
Norms in Denmark compared to Sweden
Scientific evidence
Choice of treatment
Economic considerations
DRG (diagnosis related group)
Private-public comparisons
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