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Does the Geographical Distribution of Physicians Reflect Market Failure?

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  • Joseph P. Newhouse
  • Albert P. Williams
  • Bruce W. Bennett
  • William B. Schwartz

Abstract

Public policy toward the geographic distribution of physicians presumes that the market fails because physicians can create their own demand. A number of government interventions attempt to correct this market failure. We derive several predictions about physical location behavior from standard location theory (i.e., assuming the market does not fail). The data generally support these predictions. At a theoretical level the ability of physicians to induce demand is neither necessary nor sufficient to demonstrate that physicians will locate only in large cities as their numbers increase. The premises of public policy toward the geographic distribution of physicians need rethinking.

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Bibliographic Info

Article provided by The RAND Corporation in its journal Bell Journal of Economics.

Volume (Year): 13 (1982)
Issue (Month): 2 (Autumn)
Pages: 493-505

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Handle: RePEc:rje:bellje:v:13:y:1982:i:autumn:p:493-505

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Cited by:
  1. Martin Gaynor & Deborah Haas-Wilson, 1998. "Change, Consolidation, and Competition in Health Care Markets," NBER Working Papers 6701, National Bureau of Economic Research, Inc.
  2. Martin Gaynor & Robert J Town, 2012. "Competition in Health Care Markets," The Centre for Market and Public Organisation 12/282, Department of Economics, University of Bristol, UK.
  3. Chen, Zhuo & Roy, Kakoli & Haddix, Anne C. & Thacker, Stephen B., 2010. "Factors associated with differences in mortality and self-reported health across states in the United States," Health Policy, Elsevier, vol. 94(3), pages 203-210, March.
  4. Bound, John & Groen, Jeffrey & Kezdi, G.Gabor & Turner, Sarah, 2004. "Trade in university training: cross-state variation in the production and stock of college-educated labor," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 143-173.
  5. George M. Holmes, . "The Long Term Effect of the National Health Service Corps," Working Papers 0104, East Carolina University, Department of Economics.
  6. Gächter, Martin & Schwazer, Peter & Theurl, Engelbert & Winner, Hannes, 2011. "Physician Density in a Two-Tiered Health Care System," Working Papers in Economics and Finance 2011-5, University of Salzburg.
  7. Gabrielle Wanzenried & Sandra Nocera, 2008. "The Evolution of Physician Density in Switzerland," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 144(II), pages 247-282, June.
  8. Correia Isabel & Veiga Paula, 2010. "Geographic distribution of physicians in Portugal," The European Journal of Health Economics, Springer, vol. 11(4), pages 383-393, August.
  9. John Bound & Jeffrey Groen & Gabor Kezdi & Sarah Turner, 2001. "Trade in University Training: Cross-State Variation in the Production and Use of College-Educated Labor," NBER Working Papers 8555, National Bureau of Economic Research, Inc.
  10. Ozcan, Yasar A., 1995. "Efficiency of hospital service production in local markets: The balance sheet of U.S. medical armament," Socio-Economic Planning Sciences, Elsevier, vol. 29(2), pages 139-150, June.
  11. Tanya Wanchek & Terance J. Rephann & William Shobe, 2011. "Oral Health and the Dental Care Workforce in Southwest Virginia," Reports 2011-03, Center for Economic and Policy Studies.
  12. Matsumoto, Masatoshi & Inoue, Kazuo & Bowman, Robert & Noguchi, Satomi & Kajii, Eiji, 2010. "Physician scarcity is a predictor of further scarcity in US, and a predictor of concentration in Japan," Health Policy, Elsevier, vol. 95(2-3), pages 129-136, May.
  13. Holmes, George M., 2005. "Increasing physician supply in medically underserved areas," Labour Economics, Elsevier, vol. 12(5), pages 697-725, October.
  14. Burkey, M.L. & Bhadury, J. & Eiselt, H.A., 2012. "A location-based comparison of health care services in four U.S. states with efficiency and equity," Socio-Economic Planning Sciences, Elsevier, vol. 46(2), pages 157-163.
  15. Sandra Nocera & Gabrielle Wanzenried, 2002. "On the Dynamics of Physician Density; Theory and Empirical Evidence for Switzerland," Diskussionsschriften dp0208, Universitaet Bern, Departement Volkswirtschaft.
  16. Michael Benarroch & Hugh Grant, 2004. "The interprovincial migration of Canadian physicians: does income matter?," Applied Economics, Taylor & Francis Journals, vol. 36(20), pages 2335-2345.
  17. Bruce Carpenter & Stephen Neun, 1999. "An analysis of the location decision of young primary care physicians," Atlantic Economic Journal, International Atlantic Economic Society, vol. 27(2), pages 135-149, June.
  18. George M. Holmes, 2004. "Does the National Health Service Corps Improve Physician Supply in Underserved Locations?," Eastern Economic Journal, Eastern Economic Association, vol. 30(4), pages 563-581, Fall.
  19. Polsky, Daniel & Kletke, Phillip R. & Wozniak, Gregory D. & Escarce, Jose J., 2000. "HMO penetration and the geographic mobility of practicing physicians," Journal of Health Economics, Elsevier, vol. 19(5), pages 793-809, September.
  20. Matsumoto, Masatoshi & Inoue, Kazuo & Bowman, Robert & Noguchi, Satomi & Toyokawa, Satoshi & Kajii, Eiji, 2010. "Geographical distributions of physicians in Japan and US: Impact of healthcare system on physician dispersal pattern," Health Policy, Elsevier, vol. 96(3), pages 255-261, August.

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