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Spatial dependence in physicians’ prices and additional fees: Evidence from France

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  • Montmartin, Benjamin
  • Herrera-Gómez, Marcos

Abstract

Concerns about healthcare affordability have grown in France as physician additional fees have increased threefold in the last 20 years. In this paper, we develop an innovative structural spatial framework to provide new insights into free-billing physician pricing behavior. We empirically test a closed-form solution of a circular city model with heterogeneous physicians by using a unique geolocalized database that covers more than 4000 private practitioners in three specializations (ophthalmology, gynecology and pediatrics). We highlight a positive spatial dependence in prices for all specialties that increases with physician density. This result reflects markets in which both prices are strategic complements and incentives for quality competition are low. We also find evidence of potential noncompetitive behavior for two specialties for which price and competition measures are positively related. These findings in the context of a growing spatial concentration of free-billing physicians emphasize key mechanisms explaining the increasing of additional fees.

Suggested Citation

  • Montmartin, Benjamin & Herrera-Gómez, Marcos, 2023. "Spatial dependence in physicians’ prices and additional fees: Evidence from France," Journal of Health Economics, Elsevier, vol. 88(C).
  • Handle: RePEc:eee:jhecon:v:88:y:2023:i:c:s0167629623000012
    DOI: 10.1016/j.jhealeco.2023.102724
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    More about this item

    Keywords

    Spatial dependence; Strategic complementarity; Additional fees; Competition; Differentiation;
    All these keywords.

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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