A re-examination of the meaning and importance of supplier-induced demand.
Despite twenty years of work on supplier-induced demand (SID) there has been little discussion or investigation of how inducement affects the health of patients. We develop a conceptual framework for SID which includes the clinical effectiveness of the health services utilized as well as the effectiveness of the agency relationship between the physician and the patient. The framework is used to identify several conceptually distinct types of utilization--each with its own policy implications--which have been intermingled in the SID literature. After examining each type of utilization, we conclude that a continued focus by health economists on the phenomenon of inducement (even within an extended conceptual framework) may be too limited for the development of policies regarding health service utilization.
Centre for Health Economics and Policy Analysis, McMaster University, Hamilton, Ont., Canada.
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Labelle
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Stoddart
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Rice
D003659:Decision Making, Organizational; D006300:Health Services Misuse; D006301:Health Services Needs and Demand / Q000191:economics / Q000706:statistics & numerical data*; D006302:Health Services Research / Q000379:methods; D017059:Models, Econometric; D017063:Outcome Assessment, Health Care / Q000706:statistics & numerical data*; D010819:Physician's Role; D011050:Policy Making; D014481:United States; D014600:Utilization Review / Q000706:statistics & numerical data