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Fixed fees and physician-induced demand: A panel data study on French physicians

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Author Info
Eric Delattre (Thema, Université de Cergy-Pontoise, France)
Brigitte Dormont (Thema, Université Paris X-Nanterre, France and IEMS, Lausanne, Switzerland)

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Abstract

This paper investigates on the existence of physician-induced demand (PID) for French physicians. The test is carried out for GPs and specialists, using a representative sample of 4500 French self-employed physicians over the 1979-1993 period. These physicians receive a fee-for-services (FFS) payment and fees are controlled. The panel structure of our data allows us to take into account unobserved heterogeneity related to the characteristics of physicians and their patients. We use generalized method of moments (GMM) estimators in order to obtain consistent and efficient estimates. We show that physicians experience a decline of the number of consultations when they face an increase in the physician:population ratio. However this decrease is very slight. In addition, physicians counterbalance the fall in the number of consultations by an increase in the volume of care delivered in each encounter. Econometric results give a strong support for the existence of PID in the French system for ambulatory care. Copyright © 2003 John Wiley & Sons, Ltd.

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Publisher Info
Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 12 (2003)
Issue (Month): 9 ()
Pages: 741-754
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Handle: RePEc:wly:hlthec:v:12:y:2003:i:9:p:741-754

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Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Blackwell Publishing, vol. 58(2), pages 277-97, April. [Downloadable!] (restricted)
  2. Fredrik Carlsen & Jostein Grytten, 1998. "More physicians: improved availability or induced demand?," Health Economics, John Wiley & Sons, Ltd., vol. 7(6), pages 495-508.
  3. Folland, Sherman & Stano, Miron, 1989. "Sources of small area variations in the use of medical care," Journal of Health Economics, Elsevier, vol. 8(1), pages 85-107, March. [Downloadable!] (restricted)
  4. Mark V. Pauly & Mark A. Satterthwaite, 1981. "The Pricing of Primary Care Physicians' Services: A Test of the Role of Consumer Information," Bell Journal of Economics, The RAND Corporation, vol. 12(2), pages 488-506, Autumn. [Downloadable!] (restricted)
  5. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
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  6. Richard Blundell & Steve Bond & Frank Windmeijer, 2000. "Estimation in dynamic panel data models: improving on the performance of the standard GMM estimator," IFS Working Papers W00/12, Institute for Fiscal Studies. [Downloadable!]
  7. Grytten, Jostein & Sorensen, Rune, 2001. "Type of contract and supplier-induced demand for primary physicians in Norway," Journal of Health Economics, Elsevier, vol. 20(3), pages 379-393, May. [Downloadable!] (restricted)
  8. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August. [Downloadable!] (restricted)
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  9. Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-38, May. [Downloadable!] (restricted)
  10. Asher Wolinsky, 1993. "Competition in a Market for Informed Experts' Services," RAND Journal of Economics, The RAND Corporation, vol. 24(3), pages 380-398, Autumn. [Downloadable!] (restricted)
  11. Rune J. Sørensen & Jostein Grytten, 1999. "Competition and supplier-induced demand in a health care system with fixed fees," Health Economics, John Wiley & Sons, Ltd., vol. 8(6), pages 497-508.
  12. Dranove, David & Wehner, Paul, 1994. "Physician-induced demand for childbirths," Journal of Health Economics, Elsevier, vol. 13(1), pages 61-73, March. [Downloadable!] (restricted)
  13. McGuire, Thomas G., 2000. "Physician agency," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 9, pages 461-536 Elsevier. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Brigitte Dormont & Hélène Huber, 2006. "Ageing and changes in medical practices : reassessing the
    influence of demography    ," Post-Print halshs-00274723_v1, HAL. [Downloadable!]
  2. Brigitte Dormont & Anne-Laure Samson, 2007. "Intergenerational inequalities in GPs' earnings : experience, time and cohort effects," Working Papers 0704, University of Lausanne, Institute of Health Economics and Management (IEMS). [Downloadable!]
  3. Brigitte Dormont & Anne-Laure Samson, 2007. "Intergenerational inequalities in GPs’ earnings: experience, time and cohort effects," EconomiX Working Papers 2007-34, University of Paris West - Nanterre la Défense, EconomiX. [Downloadable!]
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