Events

Professor Xuan Zhang
Assistant professor of economics
Singapore Management University

Very Important Persons (VIPs) often receive preferential treatment across many settings. We study how patients’ privileged traits, including insider knowledge, social ties to physicians, and organizational authority, drive physicians’ clinical decision-making. We leverage a policy reform that alters physicians’ financial incentives without affecting patient-physician matching. Using 100% insurance claim data from a Chinese city, we separately examine how physicians’ responses vary by patients’ privileged traits. We show that a policy eliminating physician profits from drug sales reduces drug utilization but increases the use of other forms of care, raising overall costs without improving patient health. These responses are substantial for non-insider patients and attenuate markedly at each step from non-insiders to different-hospital insiders and from different-hospital insiders to same-hospital insiders, but diminish only modestly between low-ranking and high-ranking colleagues within the same hospital, suggesting that insider access to efficient care operates primarily through insider knowledge and social ties rather than organizational rank.