Physician dual practice

Abstract

Physicians employed in government clinics and hospitals also frequently have private practices. The economic theory of such dual practice is relatively limited and recent. We provide a summary and comparison of five models of dual practice, including one we have developed based on total compensation theory and contracting limitations. We also discuss whether theoretical predictions are consistent with empirical evidence from developed and developing countries. We argue that the social trade-off between the benefits and costs of dual practice hinge on the quality of a country's contracting institutions. The conclusion outlines a proposed research agenda for better understanding this widespread phenomenon in the health sector and in other segments of society.