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Market Conditions and General Practitioners' Referrals

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  • Tor Iversen

    ()
    (Institute of Health Management and Health Economics, University of Oslo)

  • Ching-to Albert Ma

    ()
    (Department of Economics, Boston University)

Abstract

We study how market conditions in?uence referrals of patients by general practitioners (GPs). We set up a model of GP referral for the Norwegian health care system, where a GP receives capitation payment based on the number of patients in his practice, as well as fee-for-service reimbursements. A GP may accept new patients or close the practice to new patients. We model GPs as partially altruistic, and compete for patients. We show that a GP operating in a more competitive market refers more. To retain patients in his practice, a GP satis?es patients' requests for referrals. Furthermore, a GP who faces patient shortage will refer more often than a GP who has enough patients. More referrals may add to pro?ts from future treatments. Using data of radiology referrals by GPs in Norway, we test and confirm our theory.

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Bibliographic Info

Paper provided by Boston University - Department of Economics in its series Boston University - Department of Economics - Working Papers Series with number wp2009-009.

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Length: 29
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Handle: RePEc:bos:wpaper:wp2009-009

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References

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  1. Paula González, 2008. "Gatekeeping versus Direct-Access when Patient Information Matters," Working Papers 2008-05, FEDEA.
  2. James Malcomson, 2003. "Health Service Gatekeepers," CESifo Working Paper Series 1063, CESifo Group Munich.
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  4. Tor Iversen & Hilde Lurås, 2000. "The effect of capitation on GPs' referral decisions," Health Economics, John Wiley & Sons, Ltd., vol. 9(3), pages 199-210.
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  16. Brekke, Kurt R. & Nuscheler, Robert & Straume, Odd Rune, 2007. "Gatekeeping in health care," Journal of Health Economics, Elsevier, vol. 26(1), pages 149-170, January.
  17. Propper, Carol & Burgess, Simon & Green, Katherine, 2004. "Does competition between hospitals improve the quality of care?: Hospital death rates and the NHS internal market," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1247-1272, July.
  18. A. Michael Spence, 1975. "Monopoly, Quality, and Regulation," Bell Journal of Economics, The RAND Corporation, vol. 6(2), pages 417-429, Autumn.
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Cited by:
  1. Godager, Geir & Iversen, Tor & Albert Ma, Ching-to, 2012. "Competition, Gatekeeping, and Health Care Access," HERO On line Working Paper Series 2012:2, Oslo University, Health Economics Research Programme.

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