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Health Care Competition and Antibiotic Use in Taiwan

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  • Daniel Bennett
  • Che-Lun Hung
  • Tsai-Ling Lauderdale

Abstract

type="main"> Antibiotic resistance, a negative externality of antibiotic use, is a growing threat to public health. Health care competition may encourage antibiotic use because receiving an antibiotic is a form of ‘quality’ for many patients. This paper examines the effect of market concentration on antibiotic use in a large, nationally-representative data set from Taiwan. Moving from the 75th percentile to the 25th percentile of market concentration is associated with 6.6 per cent greater antibiotic use. We control for leading market-level confounds, including population density and community health. We also show that the correlation is robust using fixed effects for patients, physicians and diagnoses. We document the correlation between antibiotic use and patient retention, which suggests a mechanism for this result. Finally, we show that strict regulation of antibiotics reduces but does not eliminate the effect of competition on antibiotic use.

Suggested Citation

  • Daniel Bennett & Che-Lun Hung & Tsai-Ling Lauderdale, 2015. "Health Care Competition and Antibiotic Use in Taiwan," Journal of Industrial Economics, Wiley Blackwell, vol. 63(2), pages 371-393, June.
    • Handle: RePEc:bla:jindec:v:63:y:2015:i:2:p:371-393
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    References listed on IDEAS

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    Cited by:

    1. Shan Huang & Hannes Ullrich, 2021. "Physician Effects in Antibiotic Prescribing: Evidence from Physician Exits," CESifo Working Paper Series 9204, CESifo.
    2. Michael Allan Ribers & Hannes Ullrich, 2020. "Machine Predictions and Human Decisions with Variation in Payoffs and Skill," CESifo Working Paper Series 8702, CESifo.
    3. Mittag, Nikolas, 2016. "A Simple Method to Estimate Large Fixed Effects Models Applied to Wage Determinants and Matching," IZA Discussion Papers 10447, Institute of Labor Economics (IZA).
    4. Michael Allan Ribers & Hannes Ullrich, 2019. "Battling antibiotic resistance: can machine learning improve prescribing?," CESifo Working Paper Series 7654, CESifo.
    5. Michael Allan Ribers & Hannes Ullrich, 2023. "Machine learning and physician prescribing: a path to reduced antibiotic use," Berlin School of Economics Discussion Papers 0019, Berlin School of Economics.
    6. Hannes Ullrich & Michael Allan Ribers, 2023. "Machine predictions and human decisions with variation in payoffs and skill: the case of antibiotic prescribing," Berlin School of Economics Discussion Papers 0027, Berlin School of Economics.
    7. Kyle, Margaret K., 2022. "Incentives for pharmaceutical innovation: What’s working, what’s lacking," International Journal of Industrial Organization, Elsevier, vol. 84(C).
    8. Mittag, Nikolas, 2012. "New methods to estimate models with large sets of fixed effects with an application to matched employer-employee data from Germany," FDZ Methodenreport 201201_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    9. Janet Currie & Wanchuan Lin & Juanjuan Meng, 2012. "Using Audit Studies to Test for Physician Induced Demand: The Case of Antibiotic Abuse in China," NBER Working Papers 18153, National Bureau of Economic Research, Inc.
    10. Anthony Scott & Peter Sivey, 2022. "Motivation and competition in health care," Health Economics, John Wiley & Sons, Ltd., vol. 31(8), pages 1695-1712, August.
    11. Sebastian Panthöfer, 2022. "Do doctors prescribe antibiotics out of fear of malpractice?," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 19(2), pages 340-381, June.
    12. Sergei Koulayev & Emilia Simeonova & Niels Skipper, 2017. "Can Physicians Affect Patient Adherence With Medication?," Health Economics, John Wiley & Sons, Ltd., vol. 26(6), pages 779-794, June.
    13. Albert, Jason, 2021. "Strategic dynamics of antibiotic use and the evolution of antibiotic-resistant infections," International Journal of Industrial Organization, Elsevier, vol. 77(C).
    14. Kim, Woohyeon & Han, Euna, 2022. "Antibiotic prescription for acute upper respiratory tract infections: Understanding patient and physician contributions via patients’ migration," Social Science & Medicine, Elsevier, vol. 314(C).
    15. Godager , Geir & Scott, Anthony, 2023. "Physician Behavior and Health Outcomes," HERO Online Working Paper Series 2023:3, University of Oslo, Health Economics Research Programme.
    16. Rubli, Adrian, 2023. "Trade-offs between access and quality in healthcare: Evidence from retail clinics in Mexico," Journal of Public Economics, Elsevier, vol. 224(C).
    17. He, Daixin & Lu, Fangwen & Yang, Jianan, 2023. "Impact of self- or social-regarding health messages: Experimental evidence based on antibiotics purchases," Journal of Development Economics, Elsevier, vol. 163(C).
    18. Farasat A.S. Bokhari & Franco Mariuzzo & Weijie Yan, 2019. "Antibacterial resistance and the cost of affecting demand: the case of UK antibiotics," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2019-03, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    19. Dubois, Pierre & Gokkoca, Gokce, 2023. "Antibiotic Demand in the Presence of Antimicrobial Resistance," TSE Working Papers 23-1457, Toulouse School of Economics (TSE).
    20. Meng‐Chi Tang, 2023. "A structural analysis of physician agency and pharmaceutical demand," Health Economics, John Wiley & Sons, Ltd., vol. 32(7), pages 1453-1477, July.
    21. Mittag, Nikolas, 2019. "A simple method to estimate large fixed effects models applied to wage determinants," Labour Economics, Elsevier, vol. 61(C).
    22. Shan Huang & Hannes Ullrich, 2023. "Provider effects in antibiotic prescribing: Evidence from physician exits," Berlin School of Economics Discussion Papers 0018, Berlin School of Economics.
    23. Nikolas Mittag, 2015. "A Simple Method to Estimate Large Fixed Effects Models Applied to Wage Determinants and Matching," CERGE-EI Working Papers wp532, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    24. Currie, Janet & Lin, Wanchuan & Meng, Juanjuan, 2014. "Addressing antibiotic abuse in China: An experimental audit study," Journal of Development Economics, Elsevier, vol. 110(C), pages 39-51.

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