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Entry into the Physicians’ Market: Empirical Evidence from the Outpatient Sector in Austria


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  • Martin Gaechter

    (University of Innsbruck)

  • Peter Schwazer

    (University of Innsbruck)

  • Engelbert Theurl

    (University of Innsbruck)


In forming strategies to improve the macro performance of health care systems, effective interaction between the public and private service provisions is considered an important aspect of institutional design. Recent economic research has provided valuable insights into the significance of this interaction. We study the market entry decisions of private physicians in the outpatient health care sector inAustria by applying an entry/exit model at two different spatial levels of aggregation and using data from the time period 2002–2008. By estimating a Poisson panel data model with community/district fixed effects, we find a significantly negative effect of existing physician capacities in a specialty, both in the public and private sectors, on the entry of new private physicians. On the contrary, we find a significantly positive effect of existing private general practitioners on the entry of private specialists. These findings indicate that private physicians tend to (i) compensate for regional differences in public outpatient capacities, and (ii) establish cooperative networks where they collaborate with other private physicians in the local market.

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Bibliographic Info

Article provided by European Association Comenius - EACO in its journal DANUBE: Law and Economics Review.

Volume (Year): (2013)
Issue (Month): 4 (December)
Pages: 245-260

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Handle: RePEc:cmn:journl:y:2013:i:4:p:245-260

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Related research

Keywords: Entry; Outpatient Health Care; Physician Density; Physician Location;


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  1. Bresnahan, Timothy F & Reiss, Peter C, 1990. "Entry in Monopoly Markets," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 57(4), pages 531-53, October.
  2. Timothy Dunne & Mark J. Roberts & Larry Samuelson, 1988. "Patterns of Firm Entry and Exit in U.S. Manufacturing Industries," RAND Journal of Economics, The RAND Corporation, vol. 19(4), pages 495-515, Winter.
  3. Propper, Carol, 2000. "The demand for private health care in the UK," Journal of Health Economics, Elsevier, Elsevier, vol. 19(6), pages 855-876, November.
  4. Schaumans, Catherine & Verboven, Frank, 2006. "Entry and Regulation - Evidence from Health Care Professions," CEPR Discussion Papers, C.E.P.R. Discussion Papers 5482, C.E.P.R. Discussion Papers.
  5. Daniele Fabbri & Chiara Monfardini, 2003. "Public vs. Private Health Care Services Demand in Italy," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 62(1), pages 93-123, April.
  6. Capps, Cory & Dranove, David & Lindrooth, Richard C., 2010. "Hospital closure and economic efficiency," Journal of Health Economics, Elsevier, Elsevier, vol. 29(1), pages 87-109, January.
  7. Hirschey, Mark, 1981. "The Effect of Advertising on Industrial Mobility, 1947-72," The Journal of Business, University of Chicago Press, University of Chicago Press, vol. 54(2), pages 329-39, April.
  8. Atella, Vincenzo & Deb, Partha, 2008. "Are primary care physicians, public and private sector specialists substitutes or complements? Evidence from a simultaneous equations model for count data," Journal of Health Economics, Elsevier, Elsevier, vol. 27(3), pages 770-785, May.
  9. Jean Abraham & Martin Gaynor & William B. Vogt, 2005. "Entry and Competition in Local Hospital Markets," GSIA Working Papers, Carnegie Mellon University, Tepper School of Business 1999-E32, Carnegie Mellon University, Tepper School of Business.
  10. Duetsch, Larry L, 1984. "Entry and the Extent of Multiplant Operations," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 32(4), pages 477-87, June.
  11. Gächter, Martin & Schwazer, Peter & Theurl, Engelbert & Winner, Hannes, 2012. "Physician density in a two-tiered health care system," Health Policy, Elsevier, Elsevier, vol. 106(3), pages 257-268.
  12. Vincenzo Atella & Francesco Brindisi & Partha Deb & Furio C. Rosati, 2004. "Determinants of access to physician services in Italy: a latent class seemingly unrelated probit approach," Health Economics, John Wiley & Sons, Ltd., vol. 13(7), pages 657-668.
  13. Dale Orr, 1974. "The Economic Determinants of Entry into Canadian Banking: 1963-7," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 7(1), pages 82-99, February.
  14. Orr, Dale, 1974. "The Determinants of Entry: A Sudy of the Canadian Manufacturing Industries," The Review of Economics and Statistics, MIT Press, vol. 56(1), pages 58-66, February.
  15. Michael J. Mazzeo, 2002. "Product Choice and Oligopoly Market Structure," RAND Journal of Economics, The RAND Corporation, vol. 33(2), pages 221-242, Summer.
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