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Identification of Supplier-induced Demand What kind of consumer information matters?

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  • Christian Schmid

Abstract

The focus of the present study is on consumer health information in relation to supplier induced demand (SID). We argue that previously used measures of consumer health information are not suitable to identify SID. Using a new information measure based on questions of the Swiss Health Survey, we estimate a Poisson hurdle model for office visits. We find that information has a negative effect on health care utilization, thus providing evidence for the SID hypothesis.

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Paper provided by Universitaet Bern, Departement Volkswirtschaft in its series Diskussionsschriften with number dp1301.

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Date of creation: Oct 2013
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Handle: RePEc:ube:dpvwib:dp1301

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Keywords: Supplier-Induced Demand; Consumer Information; Poisson-hurdle model;

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  1. Richard D. Auster & Ronald L. Oaxaca, 1981. "Identification of Supplier Induced Demand in the Health Care Sector," Journal of Human Resources, University of Wisconsin Press, vol. 16(3), pages 327-342.
  2. Cromwell, Jerry & Mitchell, Janet B., 1986. "Physician-induced demand for surgery," Journal of Health Economics, Elsevier, vol. 5(4), pages 293-313, December.
  3. Mullahy, John, 1986. "Specification and testing of some modified count data models," Journal of Econometrics, Elsevier, vol. 33(3), pages 341-365, December.
  4. Rune J. S�rensen & Jostein Grytten, 1999. "Competition and supplier-induced demand in a health care system with fixed fees," Health Economics, John Wiley & Sons, Ltd., vol. 8(6), pages 497-508.
  5. Dranove, David & Wehner, Paul, 1994. "Physician-induced demand for childbirths," Journal of Health Economics, Elsevier, vol. 13(1), pages 61-73, March.
  6. Grytten, Jostein & Sorensen, Rune, 2001. "Type of contract and supplier-induced demand for primary physicians in Norway," Journal of Health Economics, Elsevier, vol. 20(3), pages 379-393, May.
  7. Dranove, David, 1988. "Demand Inducement and the Physician/Patient Relationship," Economic Inquiry, Western Economic Association International, vol. 26(2), pages 281-98, April.
  8. Hay, Joel & Leahy, Michael J., 1982. "Physician-induced demand : An empirical analysis of the consumer information gap," Journal of Health Economics, Elsevier, vol. 1(3), pages 231-244, December.
  9. Birch, Stephen, 1988. "The identification of supplier-inducement in a fixed price system of health care provision : The case of dentistry in the United Kingdom," Journal of Health Economics, Elsevier, vol. 7(2), pages 129-150, June.
  10. Winkelmann, Rainer & Zimmermann, Klaus F, 1995. " Recent Developments in Count Data Modelling: Theory and Application," Journal of Economic Surveys, Wiley Blackwell, vol. 9(1), pages 1-24, March.
  11. Feldstein, Martin S, 1970. "The Rising Price of Physicians' Services," The Review of Economics and Statistics, MIT Press, vol. 52(2), pages 121-33, May.
  12. Labelle, Roberta & Stoddart, Greg & Rice, Thomas, 1994. "A re-examination of the meaning and importance of supplier-induced demand," Journal of Health Economics, Elsevier, vol. 13(3), pages 347-368, October.
  13. Reinhardt, Uwe E., 1985. "The theory of physician-induced demand reflections after a decade," Journal of Health Economics, Elsevier, vol. 4(2), pages 187-193, June.
  14. Victor R. Fuchs, 1978. "The Supply of Surgeons and the Demand for Operations," NBER Working Papers 0236, National Bureau of Economic Research, Inc.
  15. Kenkel, Don, 1990. "Consumer Health Information and the Demand for Medical Care," The Review of Economics and Statistics, MIT Press, vol. 72(4), pages 587-95, November.
  16. Farley, Pamela J., 1986. "Theories of the price and quantity of physician services : A synthesis and critique," Journal of Health Economics, Elsevier, vol. 5(4), pages 315-333, December.
  17. Phelps, Charles E., 1986. "Induced demand -- can we ever know its extent?," Journal of Health Economics, Elsevier, vol. 5(4), pages 355-365, December.
  18. Cameron, A Colin & Trivedi, Pravin K, 1986. "Econometric Models Based on Count Data: Comparisons and Applications of Some Estimators and Tests," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 1(1), pages 29-53, January.
  19. Mullahy, John, 1998. "Much ado about two: reconsidering retransformation and the two-part model in health econometrics," Journal of Health Economics, Elsevier, vol. 17(3), pages 247-281, June.
  20. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-55, March-Apr.
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