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Market conditions and general practitioners’ referrals

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Author Info

  • Ching-to Albert MA

    ()
    (Department of Economics, Boston University.)

  • Tor Iversen

    ()
    (Department of Health Management and Health Economics, University of Oslo, Oslo, Norway)

Abstract

We study how market conditions influence referrals of patients by general practitioners (GPs).We set up a model ofGP referral for theNorwegian 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 has a higher referral rate. To compete for patients and to retain them, a GP satisfies patients’ requests for referrals. Furthermore, a GP who faces a patient shortage will refer more often than a GP who does not. Tests with Norwegian GP radiology referral data support 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 WP2010-023.

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Length: 21 pages
Date of creation: Jan 2010
Date of revision:
Handle: RePEc:bos:wpaper:wp2010-023

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Web page: http://www.bu.edu/econ/
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Related research

Keywords: Physician; Service motive; Profit motive; Referral; Radiology;

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References

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  1. 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.
  2. GONZALEZ, Paula, 2003. "The "gatekeeping" role of general practitioners. Does patients' information matter ?," CORE Discussion Papers 2003089, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  3. James Malcomson, 2003. "Health Service Gatekeepers," Economics Series Working Papers 169, University of Oxford, Department of Economics.
  4. Paula González, 2008. "Gatekeeping versus Direct-Access when Patient Information Matters," Working Papers 2008-05, FEDEA.
  5. Croxson, B. & Propper, C. & Perkins, A., 2001. "Do doctors respond to financial incentives? UK family doctors and the GP fundholder scheme," Journal of Public Economics, Elsevier, vol. 79(2), pages 375-398, February.
  6. Ching-To Albert Ma & Thomas G. Mcguire, 2002. "Network Incentives in Managed Health Care," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 11(1), pages 1-35, 03.
  7. 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.
  8. Pita Barros, Pedro Luis, 2000. "Waiting Lists and Patient Selection," CEPR Discussion Papers 2519, C.E.P.R. Discussion Papers.
  9. Stephen C. Earwicker & David K. Whynes, 1998. "General practitioners' referral thresholds and choices of referral destination: an experimental study," Health Economics, John Wiley & Sons, Ltd., vol. 7(8), pages 711-722.
  10. Pedro Pita Barros & Xavier Martinez-Giralt, 2002. "Public and Private Provision of Health Care," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 11(1), pages 109-133, 03.
  11. Fang, Hai & Rizzo, John A., 2009. "Competition and physician-enabled demand: The role of managed care," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 463-474, October.
  12. Godager, Geir & Iversen, Tor & Ma , Ching-To Albert, 2009. "Service motives and profit incentives among physicans," HERO On line Working Paper Series 2007:4, Oslo University, Health Economics Research Programme.
  13. John List & Matti Liski, 2005. "Introduction," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 31(2), pages 121-121, 06.
  14. Gary Biglaiser & Ching-to Albert Ma, 2006. "Moonlighting: Public Service and Private Practice," Boston University - Department of Economics - Working Papers Series WP2006-015, Boston University - Department of Economics.
  15. Marie Allard & Izabela Jelovac & Pierre-Thomas Léger, 2011. "Treatment and referral decisions under different physician payment mechanisms," Post-Print halshs-00650933, HAL.
  16. Odd Rune Straume & Kurt Brekke & Robert Nuscheler, 2004. "Gatekeeping In Health Care," Royal Economic Society Annual Conference 2004 83, Royal Economic Society.
  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. Glied, Sherry, 2000. "Managed care," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 13, pages 707-753 Elsevier.
  19. Paula González, 2004. "Should physicians' dual practice be limited? An incentive approach," Health Economics, John Wiley & Sons, Ltd., vol. 13(6), pages 505-524.
  20. Dusheiko, Mark & Gravelle, Hugh & Jacobs, Rowena & Smith, Peter, 2006. "The effect of financial incentives on gatekeeping doctors: Evidence from a natural experiment," Journal of Health Economics, Elsevier, vol. 25(3), pages 449-478, May.
  21. 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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