Physicians are supposed to act as agents for patients, acting in their best interest. But a question is, how well do physician know patient preferences? How well do physician preferences reflect those of patients.
Previous research indicates that for terminal diseases, patients are risk loving. My own recently published research (with co-authors Schwartz, Okoro and Romley) confirms this finding, but adds to the literature by showing that physicians are largely risk neutral or mildly risk averse.
A recent paper by Galizzi et al. (2016), however, reach a different conclusion. The do confirm that physicians are mildly risk averse but they also conclude that patients are also mildly risk averse as well. They find the following:
First, there is a significant difference in time preferences between patients and their matched doctors, with doctors discounting future health gains and financial outcomes less heavily than patients. Second, we find no systematic difference in risk preferences in the healthcare domain between patients and doctors: in our sample both patients and their matched doctors are mildly, but significantly, risk averse. Third, doctors and patients have significantly different risk preferences in the finance domain: whilst doctors are risk averse, patients are risk neutral.
There are a number of potential reasons for the difference in findings. First, the patient populations of interest differed dramatically. Whereas Shafrin et al. examined patients with advanced state melanoma and non-small cell lung cancer, Galizi et al. examined patients and physician preference at outpatient clinics for the following specialties: pathology, cardiology, gynaecology, haematology, surgery, endocrinology, orthopaedics, urology, gastroenterology, nephrology, rheumatology, ophthalmology, and otolaryngology. Notably, oncology patients were excluded from this study. Second, Shafrin et al. (2017) was conducted in the U.S. and whereas Galizzi et al. (2016) was conducted in Greece. Differences in patient preferences could explain this difference. Third, the methodology for elicitly preferences differed. While both methods compared two treatment options, Galizzi compared two risky treatment options whereas Shafrin et al. compared a risky option against a certainty equivalent option. Further, Galizzi used the Holt and Laury (2002) multiple price list whereas Shafrin et al. used parameter estimation by sequential testing to vary the certainty equivalent value depending on the respondents previous answer.
A useful innovation of the Galizzi paper is that the patients were matched to actual physicians who treated them, whereas the patient and physician selection process was done independently in Shafrin et al.
On the other hand, Shafrin et al. calibrated the “risky” treatment option to real life therapies that were relevant to the specific patient population of interest.
Overall, both studies have useful findings. Galizzi et al. aim to measure risk preferences more generally, across diseases and not calibrated to any one specific treatment. Although Galizzi’s study is broader, it is less tied to real world choices facing patients. The results of Shafrin et al. are more robust for measuring patient and provider preferences across risky oncology treatments, but these should not be extrapolated beyond this specific clinical area.