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Professional uncertainty and the problem of supplier-induced demand

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  • Wennberg, John E.
  • Barnes, Benjamin A.
  • Zubkoff, Michael
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    Abstract

    This paper discusses the puzzling problem of large differences in per capita use of certain common surgical procedures among neighboring populations, which by all available measures are quite similar in need for and access to services. The evidence reviewed here supports the hypothesis that variations occur to a large extent because of differences among physicians in their evaluation of patients (diagnosis) or in their belief in the value of the procedures for meeting patient needs (therapy). This hypothesis, which we call the professional uncertainty hypothesis, is germane to current controversies concerning the nature and extent of supplier influence on the demand for medical services. It is also important because of its implications for health regulatory policy. Our plan is to (1) review the relevance of the hypotheses for the supplier-induced demand controversy; (2) review the epidemiologic evidence on the nature and causes of variation; (3) examine patterns of use of common surgical procedures to illustrate the importance of supplier influence on utilization; and (4) consider some of the implications of the professional uncertainty hypotheses for public policy.

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    Bibliographic Info

    Article provided by Elsevier in its journal Social Science & Medicine.

    Volume (Year): 16 (1982)
    Issue (Month): 7 (January)
    Pages: 811-824

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    Handle: RePEc:eee:socmed:v:16:y:1982:i:7:p:811-824

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    Cited by:
    1. Ozegowski, Susanne & Sundmacher, Leonie, 2014. "Understanding the gap between need and utilization in outpatient care—The effect of supply-side determinants on regional inequities," Health Policy, Elsevier, vol. 114(1), pages 54-63.
    2. Gusmano, Michael K. & Weisz, Daniel & Rodwin, Victor G. & Lang, Jonas & Qian, Meng & Bocquier, Aurelie & Moysan, Veronique & Verger, Pierre, 2014. "Disparities in access to health care in three French regions," Health Policy, Elsevier, vol. 114(1), pages 31-40.
    3. Julien Mousquès & Thomas Renaud & Olivier Scemama, 2008. "A refutation of the practice style hypothesis: the case of antibiotics prescription by French general practitioners for acute rhinopharyngitis," Working Papers DT18, IRDES institut for research and information in health economics, revised Oct 2008.
    4. Winand Emons, 2010. "Incentive Compatible Reimbursement Schemes for Physicians," Diskussionsschriften dp1001, Universitaet Bern, Departement Volkswirtschaft.
    5. Corallo, Ashley N. & Croxford, Ruth & Goodman, David C. & Bryan, Elisabeth L. & Srivastava, Divya & Stukel, Therese A., 2014. "A systematic review of medical practice variation in OECD countries," Health Policy, Elsevier, vol. 114(1), pages 5-14.
    6. Eibich, Peter & Ziebarth, Nicolas R., 2013. "Analyzing Regional Variation in Health Care Utilization Using (Rich) Household Microdata," IZA Discussion Papers 7409, Institute for the Study of Labor (IZA).
    7. Eckerlund, Ingemar & Gerdtham, Ulf-G, 1996. "Variation in cesarean section rates in Sweden - Causes and economic consequences," Working Paper Series in Economics and Finance 106, Stockholm School of Economics.
    8. Bernal-Delgado, Enrique & García-Armesto, Sandra & Peiró, Salvador, 2014. "Atlas of Variations in Medical Practice in Spain: The Spanish National Health Service under scrutiny," Health Policy, Elsevier, vol. 114(1), pages 15-30.
    9. Troels Kristensen & Kim Olsen & Henrik Schroll & Janus Thomsen & Anders Halling, 2014. "Association between fee-for-service expenditures and morbidity burden in primary care," The European Journal of Health Economics, Springer, vol. 15(6), pages 599-610, July.
    10. Grytten, Jostein & Sorensen, Rune, 2003. "Practice variation and physician-specific effects," Journal of Health Economics, Elsevier, vol. 22(3), pages 403-418, May.
    11. Mickael Bech & Jørgen Lauridsen, 2009. "Exploring spatial patterns in general practice expenditure," The European Journal of Health Economics, Springer, vol. 10(3), pages 243-254, July.
    12. Victor R. Fuchs & Mark McClellan & Jonathan Skinner, 2001. "Area Differences in Utilization of Medical Care and Mortality Among U.S. Elderly," NBER Working Papers 8628, National Bureau of Economic Research, Inc.
    13. Bech, Mickael & Lauridsen, Jørgen, 2008. "Exploring the spatial pattern in hospital admissions," Health Policy, Elsevier, vol. 87(1), pages 50-62, July.
    14. Lippi Bruni, Matteo & Nobilio, Lucia & Ugolini, Cristina, 2009. "Economic incentives in general practice: The impact of pay-for-participation and pay-for-compliance programs on diabetes care," Health Policy, Elsevier, vol. 90(2-3), pages 140-148, May.
    15. Fattore, Giovanni & Frosini, Francesca & Salvatore, Domenico & Tozzi, Valeria, 2009. "Social network analysis in primary care: The impact of interactions on prescribing behaviour," Health Policy, Elsevier, vol. 92(2-3), pages 141-148, October.
    16. Mangham-Jefferies, Lindsay & Hanson, Kara & Mbacham, Wilfred & Onwujekwe, Obinna & Wiseman, Virginia, 2014. "What determines providers' stated preference for the treatment of uncomplicated malaria?," Social Science & Medicine, Elsevier, vol. 104(C), pages 98-106.

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