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May 22, 1981

Doctors and Their Workshops: Economic Models of Physician Behavior

Author Affiliations

Health Policy Program University of California San Francisco

JAMA. 1981;245(20):2099. doi:10.1001/jama.1981.03310450071037

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The jacket cover of Doctors and Their Workshops states that the book "will be of particular interest to economists, sociologists, health-services researchers, health-care providers, and planners of health-care programs and insurance policies." This is true, but for sharply divergent reasons. The book's subtitle, "Economic Models of Physician Behavior," is quite accurate, and Pauly is an expert practitioner of economic theory (model building) and hypothesis testing. This brief book includes several chapters outlining theoretical models of physician behavior that take into consideration the symbiotic relation of physicians and hospitals. The author also provides empirical tests of the models.

Based on this work, Pauly reaches several important conclusions, for instance: (1) the amount of time physicians spend in hospitals is an important determinant of hospital expenditures; (2) physicians can allocate medical resources efficiently and appropriate fee schedules will lead to an optimal allocation of resources; (3) increased physician supply may lead physicians