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Fixed fees and physician‐induced demand: A panel data study on French physicians
Author(s) -
Delattre Eric,
Dormont Brigitte
Publication year - 2003
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/hec.823
Subject(s) - panel data , payment , test (biology) , sample (material) , estimator , order (exchange) , ambulatory care , population , health care , generalized method of moments , demographic economics , actuarial science , medicine , family medicine , econometrics , economics , finance , statistics , environmental health , paleontology , chemistry , mathematics , chromatography , biology , economic growth
Abstract This paper investigates on the existence of physician‐induced demand (PID) for French physicians. The test is carried out for GPs and specialists, using a representative sample of 4500 French self‐employed physicians over the 1979–1993 period. These physicians receive a fee‐for‐services (FFS) payment and fees are controlled. The panel structure of our data allows us to take into account unobserved heterogeneity related to the characteristics of physicians and their patients. We use generalized method of moments (GMM) estimators in order to obtain consistent and efficient estimates. We show that physicians experience a decline of the number of consultations when they face an increase in the physician:population ratio. However this decrease is very slight. In addition, physicians counterbalance the fall in the number of consultations by an increase in the volume of care delivered in each encounter. Econometric results give a strong support for the existence of PID in the French system for ambulatory care. Copyright © 2003 John Wiley & Sons, Ltd.