Strategic Interaction between General Practitioners and Specialists: Implications for Gatekeeping

We propose to estimate strategic interaction eects between general practitioners (GPs) and dier- ent specialist types to evaluate the viability threat for specialists associated to the introduction of a mandatory referral scheme. That is, we show that the specialists'loss of patientele when patients can only contact them after a GP referral has important consequences for the viability of the specialist types whose entry decisions are strategic substitutes in GPs entry decisions. To estimate the strategic interaction eects, we model the entry decisions of dierent physician types as an equilibrium entry game of incomplete information and sequential decision making. This model permits identi…cation of the nature of the strategic interaction eects as it does not rely on restrictive assumptions on the underlying payofunctions and allows for the strategic interaction eects to be asymmetric in sign. At the same time, the model remains computationally tractable and allows for su¢ cient …rm heterogeneity. Our …ndings for the Belgian physician markets, in which there is no gatekeeping, indicate that entry decisions of dermatologists and pediatricians are strategic substitutes in the entry decisions of GPs, whereas the presence of gynecologists, ophthalmologists and throat, nose and ear-specialists has a positive impact on GP payos of entry. Our results thus indicate that transition costs are likely upon the implementation of gatekeeping and that these costs are mainly associated to the viability of dermatologists and pediatricians.