Doctor Competence and the Demand for Healthcare: Evidence from Rural China.

ABSTRACT

The agency problem between patients and doctors has long been emphasised in the health economics literature, but the empirical evidence on whether patients can evaluate and respond to better quality care remains mixed and inconclusive. Using household data linked to an assessment of village doctors' clinical competence in rural China, we show that there is no correlation between doctor competence and patients' healthcare utilisation, with confidence intervals reasonably tight around zero. Household perceptions of quality are an important determinant of care-seeking behaviour, yet patients appear unable to recognise more competent doctors - there is no relationship between doctor competence and perceptions of quality. Copyright © 2016 John Wiley & Sons, Ltd.