The impact of quality on the demand facing health care providers has important implications for the industrial organization of health care markets. In this paper we study the consumers' choice of general practitioner (GP) assuming they are unable to observe the true quality of GP services. A panel data set for 484 Norwegian GPs, with summary information on their patient stocks, renders the opportunity to identify and measure the impact of GP quality on the demand, accounting for patient health heterogeneity in several ways. We apply modeling and estimation procedures involving latent structural variables, inter alia, a LISREL type of model, is used. The patient excess mortality rate at the GP level is one indicator of the quality. We estimate the effect of this quality variable on the demand for each GP's services. Our results, obtained from two different econometric model versions, indicate that GP quality has a clear positive effect on demand.
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
8793.
Find related papers by JEL classification: I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Health, Education, and Welfare I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data
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