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More physicians: improved availability or induced demand?
Author(s) -
Carlsen Fredrik,
Grytten Jostein
Publication year - 1998
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/(sici)1099-1050(199809)7:6<495::aid-hec368>3.0.co;2-s
Subject(s) - reimbursement , instrumental variable , population , actuarial science , service (business) , physician supply , business , health care , health services , family medicine , medicine , economics , environmental health , marketing , econometrics , economic growth
A number of empirical studies have shown that there is a negative association between population:physician ratio and utilization of medical services. However, it is not clear whether this relationship reflects supplier‐inducement, the effect of lower prices on patient demand, a supply response to variation in health status, or improved availability. In Norway, patient fees and state reimbursement fees are set centrally. Therefore, the correlation between utilization and population:physician ratio either reflects supplier‐inducement, a supply response or an availability effect. We applied a theoretical model which distinguished between an inducement and an availability effect. The model was implemented on a cross‐sectional data set which contained information about patient visits and laboratory tests for all fee‐for‐service primary care physicians in Norway. Since population:physician ratio is potentially endogenous, an instrumental variable approach is used. We found no evidence for inducement either for number of visits or for provision of laboratory services. © 1998 John Wiley & Sons, Ltd.