3.8 A study found that urologists in group practices that profit from tests for prostate cancer order more of them than doctors who send samples to independent laboratories. Doctors’ groups that perform their own lab work bill Medicare for analyzing 72%

more prostate tissue samples per biopsy and detect fewer cases of cancer than doctors who use outside labs (Christopher Weaver, “Prostate-Test Fees Challenged,”

Wall Street Journal, April 9, 2012). Explain these results. Do these results necessarily demonstrate moral hazard, or can you explain them in another way? (Hint: See the Mini-Case, “Selfless or Selfish Doctors?”)