Fee increases and target income hypothesis: Data from quebec on physicians' compensation and service volumes

Abstract

Recent years have witnessed important public investments in physicians' compensation across Canada. The current paper uses data from Quebec to assess the impact of those investments on the volumes of services provided to the population. While total physician compensation costs, average physician compensation and average unit cost per service all rose extremely fast, the total number of services, number of services per capita and average number of services per physician either stagnated or declined. This pattern is compatible with the economic target income hypothesis and raises important policy questions.