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Competition and dental services

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Author Info

  • Jostein Grytten

    (Dental School, University of Oslo, Oslo, Norway)

  • Rune S�rensen

    (Norwegian School of Management, Sandvika, Norway)

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    Abstract

    Dental services for adults are different from all other Norwegian health services in that they are provided by private producers (dentists) who have full freedom to establish a practice. They have had this freedom since the end of World War II. A further liberalization of the market for dental services occurred in November 1995, when the so-called normal tariff was repealed. The system changed from a fixed fee system to a deregulated fee system. In principle, the market for dental services for adults operates as a free competitive market, in which dentists must compete for a market share. The aim of this study was to study the short-term effects of competition. A comprehensive set of data on fees, practice characteristics, treatment profiles and factors that dentists take into account when determining fees was analysed. The main finding was that competition has a weak effect. No support was found for the theory that the level of fees is the result of monopolistic competition or monopoly. The results also provided some evidence against the inducement hypothesis. At this stage, it is interesting to notice that dentists do not seem to exploit the power they have to control the market. One explanation, which is consistent with the more recent literature, is that physicians' behaviour to a large extent is influenced by professional norms and caring concerns about their patients. Financial incentives are important, but these incentives are constrained by norms other than self-interest. The interpretation of the results should also take into account that the deregulation has operated for a short time and that dentists and patients may not yet have adjusted to changes in the characteristics of the market. Copyright © 2000 John Wiley & Sons, Ltd.

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    Bibliographic Info

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

    Volume (Year): 9 (2000)
    Issue (Month): 5 ()
    Pages: 447-461

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    Handle: RePEc:wly:hlthec:v:9:y:2000:i:5:p:447-461

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

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    References

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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.:
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    1. Phelps, Charles E., 1986. "Induced demand -- can we ever know its extent?," Journal of Health Economics, Elsevier, vol. 5(4), pages 355-365, December.
    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. Grytten, Jostein & Dalen, Dag Morten, 1997. "Too many for too few? Efficiency among dentists working in private practice in Norway," Journal of Health Economics, Elsevier, vol. 16(4), pages 483-497, August.
    4. Birch, Stephen, 1988. "The identification of supplier-inducement in a fixed price system of health care provision : The case of dentistry in the United Kingdom," Journal of Health Economics, Elsevier, vol. 7(2), pages 129-150, June.
    5. Rune J. S�rensen & 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.
    6. T Rice & R Labelle, 1989. "Do Physicians Induce Demand for Medical Service?," Centre for Health Economics and Policy Analysis Working Paper Series 18, Centre for Health Economics and Policy Analysis (CHEPA), McMaster University, Hamilton, Canada.
    7. Propper, Carol & Wilson, Deborah & Soderlund, Neil, 1998. "The effects of regulation and competition in the NHS internal market: the case of general practice fundholder prices," Journal of Health Economics, Elsevier, vol. 17(6), pages 645-673, December.
    8. Reinhardt, Uwe E., 1985. "The theory of physician-induced demand reflections after a decade," Journal of Health Economics, Elsevier, vol. 4(2), pages 187-193, June.
    9. Shepard, Lawrence, 1978. "Licensing Restrictions and the Cost of Dental Care," Journal of Law and Economics, University of Chicago Press, vol. 21(1), pages 187-201, April.
    10. Labelle, Roberta & Stoddart, Greg & Rice, Thomas, 1994. "A re-examination of the meaning and importance of supplier-induced demand," Journal of Health Economics, Elsevier, vol. 13(3), pages 347-368, October.
    11. Hausman, Dan & Le Grand, Julian, 1999. "Incentives and health policy: primary and secondary care in the British National Health Service," Social Science & Medicine, Elsevier, vol. 49(10), pages 1299-1307, November.
    12. Dranove, David & Wehner, Paul, 1994. "Physician-induced demand for childbirths," Journal of Health Economics, Elsevier, vol. 13(1), pages 61-73, March.
    13. Grytten, Jostein & Holst, Dorthe & Laake, Peter, 1990. "Supplier inducement : Its effect on dental services in Norway," Journal of Health Economics, Elsevier, vol. 9(4), pages 483-491, December.
    14. Grytten, Jostein & Holst, Dorthe & Laake, Petter, 1993. "Accessibility of dental services according to family income in a non-insured population," Social Science & Medicine, Elsevier, vol. 37(12), pages 1501-1508, December.
    15. Carol Propper & Neil Söderlund, 1998. "Competition in the NHS internal market: an overview of its effects on hospital prices and costs," Health Economics, John Wiley & Sons, Ltd., vol. 7(3), pages 187-197.
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    Cited by:
    1. Jostein Grytten & Irene Skau, 2009. "Specialization and competition in dental health services," Health Economics, John Wiley & Sons, Ltd., vol. 18(4), pages 457-466.
    2. Mauricea Lynch & Michael Calnan, 2003. "The changing public|private mix in dentistry in the UK-a supply-side perspective," Health Economics, John Wiley & Sons, Ltd., vol. 12(4), pages 309-321.
    3. Eila Kankaanpää & Ismo Linnosmaa & Hannu Valtonen, 2011. "Public health care providers and market competition: the case of Finnish occupational health services," The European Journal of Health Economics, Springer, vol. 12(1), pages 3-16, February.
    4. Whittaker, William & Birch, Stephen, 2012. "Provider incentives and access to dental care: Evaluating NHS reforms in England," Social Science & Medicine, Elsevier, vol. 75(12), pages 2515-2521.

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