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The Effect of Physician Fees and Density Differences on Regional Variation in Hospital Treatments

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  • Rudy Douven

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  • Remco Mocking

    ()

  • Ilaria Mosca
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    Abstract

    We use a panel data set of about 1.7 million hospital records in 4,000 Dutch zip code regions for the years 2006-2009. We estimate the effect of physician fees and physician density on regional variation in hospital care for nine different treatments. Our results show that a 1 percent increase in the total number of physicians, if these extra physicians are all paid according to an output-based reimbursement scheme, would increase the number of treatments on average by 0.40 percent. For salaried physicians we find a significantly lower average effect of 0.15 percent. We find no or weak effects for hip fractures, which is included in the analysis as a control treatment. Our data allows us to deal with reverse causality, excess demand, border crossing, and availability effects. Our findings lend support to the existence of supplier induced demand for the majority of the analyzed treatments.

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    Bibliographic Info

    Paper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Discussion Paper with number 208.

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    Date of creation: Mar 2012
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    Handle: RePEc:cpb:discus:208

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    1. Victor R. Fuchs, 1978. "The Supply of Surgeons and the Demand for Operations," NBER Working Papers 0236, National Bureau of Economic Research, Inc.
    2. Grytten, Jostein & Sorensen, Rune, 2001. "Type of contract and supplier-induced demand for primary physicians in Norway," Journal of Health Economics, Elsevier, Elsevier, vol. 20(3), pages 379-393, May.
    3. LĂ©onard, Christian & Stordeur, Sabine & Roberfroid, Dominique, 2009. "Association between physician density and health care consumption: A systematic review of the evidence," Health Policy, Elsevier, Elsevier, vol. 91(2), pages 121-134, July.
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    6. Dranove, David & Wehner, Paul, 1994. "Physician-induced demand for childbirths," Journal of Health Economics, Elsevier, Elsevier, vol. 13(1), pages 61-73, March.
    7. Eric Delattre & Brigitte Dormont, 2003. "Fixed fees and physician-induced demand: A panel data study on French physicians," Health Economics, John Wiley & Sons, Ltd., vol. 12(9), pages 741-754.
    8. Jason Barro & Nancy Beaulieu, 2003. "Selection and Improvement: Physician Responses to Financial Incentives," NBER Working Papers 10017, National Bureau of Economic Research, Inc.
    9. Amitabh Chandra & Douglas O. Staiger, 2007. "Productivity Spillovers in Health Care: Evidence from the Treatment of Heart Attacks," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 115, pages 103-140.
    10. van de Vijsel, Aart R. & Engelfriet, Peter M. & Westert, Gert P., 2011. "Rendering hospital budgets volume based and open ended to reduce waiting lists: Does it work?," Health Policy, Elsevier, Elsevier, vol. 100(1), pages 60-70, April.
    11. Cromwell, Jerry & Mitchell, Janet B., 1986. "Physician-induced demand for surgery," Journal of Health Economics, Elsevier, Elsevier, vol. 5(4), pages 293-313, December.
    12. Wright, Donald J., 2007. "Specialist payment schemes and patient selection in private and public hospitals," Journal of Health Economics, Elsevier, Elsevier, vol. 26(5), pages 1014-1026, September.
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    Cited by:
    1. Jos Blank & Evelien Eggink, 2014. "The impact of policy on hospital productivity: a time series analysis of Dutch hospitals," Health Care Management Science, Springer, Springer, vol. 17(2), pages 139-149, June.

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