More physicians: improved availability or induced demand?
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.
Carlsen
F
F
Department of Economics, NTNU, Dragvoll, Norway. Fredrik.Carlsen@sv.ntnu.no
Grytten
J
J
D019411:Clinical Laboratory Techniques; D003284:Contract Services / Q000706:statistics & numerical data; D003430:Cross-Sectional Studies; D018588:Fee-for-Service Plans / Q000706:statistics & numerical data; D005251:Fees, Medical / Q000706:statistics & numerical data; D019538:Health Care Surveys / Q000379:methods*; D006301:Health Services Needs and Demand / Q000191:economics / Q000706:statistics & numerical data*; D006801:Humans; D017059:Models, Econometric; D009664:Norway; D009819:Office Visits / Q000706:statistics & numerical data; D010821:Physicians, Family / Q000191:economics / Q000600:supply & distribution*; D011156:Population Density; D012044:Regression Analysis