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Old Boys’ Network in General Practitioner’s Referral Behavior

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  • Franz Hackl
  • Michael Hummer
  • Gerald Pruckner

Abstract

We analyzed the impact of social networks on general practitioners’ (GPs) referral behavior based on administrative panel data from 2,684,273 referrals to resident specialists made between 1998 and 2007. To construct estimated social networks, we used information on the doctors’ place and time of study and their hospital work history. We found that GPs referred more patients to specialists within their social networks and that patients referred within a social network had fewer follow-up consultations and were healthier as measured by the number of inpatient days. Consequently, referrals within social networks tended to decrease healthcare costs by overcoming information asymmetry with respect to specialists’ abilities. This is supported by evidence suggesting that within a social network, better specialists receive more referrals than worse specialists in the same network.

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Bibliographic Info

Paper provided by Department of Economics, Johannes Kepler University Linz, Austria in its series Economics working papers with number 2013-10.

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Length: 49 pages
Date of creation: Jul 2013
Date of revision:
Handle: RePEc:jku:econwp:2013_10

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Keywords: Referral behavior; general practitioners; information asymmetry; social networks;

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  1. J. M. C. Santos Silva & Silvana Tenreyro, 2006. "The Log of Gravity," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 641-658, November.
  2. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-61, September.
  3. Anthony, Denise, 2003. "Changing the nature of physician referral relationships in the US: the impact of managed care," Social Science & Medicine, Elsevier, vol. 56(10), pages 2033-2044, May.
  4. Marie Allard & Izabela Jelovac & Pierre-Thomas Léger, 2011. "Treatment and referral decisions under different physician payment mechanisms," Post-Print halshs-00650933, HAL.
  5. Lauren Cohen & Andrea Frazzini & Christopher Malloy, 2008. "The Small World of Investing: Board Connections and Mutual Fund Returns," Journal of Political Economy, University of Chicago Press, vol. 116(5), pages 951-979, October.
  6. 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.
  7. Charles F. Manski, 2000. "Economic Analysis of Social Interactions," NBER Working Papers 7580, National Bureau of Economic Research, Inc.
  8. Marinoso, Begona Garcia & Jelovac, Izabela, 2003. "GPs' payment contracts and their referral practice," Journal of Health Economics, Elsevier, vol. 22(4), pages 617-635, July.
  9. Paul Gompers & Vladimir Mukharlyamov & Yuhai Xuan, 2012. "The Cost of Friendship," NBER Working Papers 18141, National Bureau of Economic Research, Inc.
  10. Hanming Fang & Andrea Moro, 2010. "Theories of Statistical Discrimination and Affirmative Action: A Survey," NBER Working Papers 15860, National Bureau of Economic Research, Inc.
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