The Determinates of the Provision of Charity Medical Care by Physicians

Abstract

We provide a theoretical model and an empirical analysis of the factors affecting the magnitude of a physician's provision of free or reduced-fee medical care. The theoretical basis of our analysis is Becker's theory of the allocation of time. Our empirical model also accounts for other factors that affect the provision of charity care. Our results indicate that physicians are likely to reduce charity care as the opportunity cost of their time increases. We also found some indirect evidence that physicians who lower their fees for low-income patients are behaving charitably and may not be engaging in price discrimination.