Monetary Incentives Versus Public Funding in Healthcare Research: What Matters the Most?

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We study how different policy approaches affect scientific productivity among high-skilled workers in a major Italian teaching hospital. We compare two alternative strategies for promoting research activity: individual performance incentives and institutional research capacity building through funding. The first intervention is a performance-based bonus scheme (Management-by-Objectives, MBO) rewarding non-academic physicians for publishing scientific articles. The second is the hospital’s recognition as a Scientific Institute for Research, Hospitalization and Healthcare (IRCCS), which granted access to dedicated public research funding and expanded the institution’s research capacity. Using detailed physician-level panel data covering the period 2012–2022, we implement a set of different difference-in-differences strategies to evaluate the effects of both interventions. We find that monetary incentives alone do not significantly increase research output among non-academic physicians. By contrast, IRCCS recognition generates a large and persistent increase in scientific productivity among researchers exposed to the new research environment, mostly academic researchers not eligible for the incentives, although individuals exposed to both policies increased their production too. We provide evidence that the increase in output operates mostly through the intensive margin, via scaling up the research output and the expansion of existing research teams, rather than by reallocation across specialties and the emerging of new research links, with no spillovers across physician categories. While total citations increase because of higher volumes, citations per paper decline, pointing to a quantity–quality trade-off. Consistent with a broader expansion of research-related activity, we also document substantial growth in high-complexity surgical procedures, with no systematic evidence of changes in healthcare quality indicators

Keywords: High-skilled Workers, Knowledge Production, Management-By-Objective, Public Funding, Research Productivity JEL Classification: I10, I23.