Why might it be better for a hospital to pay physicians an hourly wage rather than by the revenue that they generate from treating patients?
A) Encourages physicians to reduce their effort (which the employer cannot observe).
B) Discourages physicians from excessive treatment.
C) Increases the risk on physicians.
D) Both a and c.
E) Both b and c.

Question

Quizplus · Accepted Answer

Paying physicians an hourly wage discourages excessive treatment because their compensation is not tied to the number of procedures or treatments they perform, reducing the incentive to over-treat patients for financial gain.

Why Might It Be Better for a Hospital to Pay