Policy and regulatory responses to dual practice in the health sector

Abstract

Physician dual practice is a widespread phenomenon which has implications for the equity, efficiency and quality of health care provision. Central to the analysis of physician dual practice is the trade-off between its benefits and costs, as well as the convenience of regulating it to undermine its adverse consequences. In this paper, we study and analyze different governmental responses to this activity. We find that internationally, there are wide variations in how governments tackle this issue. While some governments fully prohibit this practice, others regulate or restrict dual job holding with different intensities and regulatory instruments. The measures implemented include limiting the income physicians can earn through dual job holding, offering work benefits to physicians in exchange for their working exclusively in the public sector, raising public salaries, and allowing physicians to perform private practice at public facilities. We present the pros and cons of each of these alternatives and show how the health care market and institutional arrangements are crucial for the design and implementation of each of these strategies. The paper also identifies the need for empirical evidence on the effect of different government strategies on dual practice.