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Professional uncertainty and the problem of supplier-induced demand

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  • Wennberg, John E.
  • Barnes, Benjamin A.
  • Zubkoff, Michael

Abstract

This paper discusses the puzzling problem of large differences in per capita use of certain common surgical procedures among neighboring populations, which by all available measures are quite similar in need for and access to services. The evidence reviewed here supports the hypothesis that variations occur to a large extent because of differences among physicians in their evaluation of patients (diagnosis) or in their belief in the value of the procedures for meeting patient needs (therapy). This hypothesis, which we call the professional uncertainty hypothesis, is germane to current controversies concerning the nature and extent of supplier influence on the demand for medical services. It is also important because of its implications for health regulatory policy. Our plan is to (1) review the relevance of the hypotheses for the supplier-induced demand controversy; (2) review the epidemiologic evidence on the nature and causes of variation; (3) examine patterns of use of common surgical procedures to illustrate the importance of supplier influence on utilization; and (4) consider some of the implications of the professional uncertainty hypotheses for public policy.

Suggested Citation

  • Wennberg, John E. & Barnes, Benjamin A. & Zubkoff, Michael, 1982. "Professional uncertainty and the problem of supplier-induced demand," Social Science & Medicine, Elsevier, vol. 16(7), pages 811-824, January.
  • Handle: RePEc:eee:socmed:v:16:y:1982:i:7:p:811-824
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    Cited by:

    1. Eckerlund, Ingemar & Gerdtham, Ulf-G, 1996. "Variation in cesarean section rates in Sweden - Causes and economic consequences," SSE/EFI Working Paper Series in Economics and Finance 106, Stockholm School of Economics.
    2. Bernal-Delgado, Enrique & García-Armesto, Sandra & Peiró, Salvador, 2014. "Atlas of Variations in Medical Practice in Spain: The Spanish National Health Service under scrutiny," Health Policy, Elsevier, vol. 114(1), pages 15-30.
    3. Eibich, Peter & Ziebarth, Nicolas R., 2014. "Analyzing Regional Variation in Health Care Utilization Using (Rich) Household Microdata," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 41-53.
    4. Jonathan S. Skinner & Elliott S. Fisher & John Wennberg, 2005. "The Efficiency of Medicare," NBER Chapters,in: Analyses in the Economics of Aging, pages 129-160 National Bureau of Economic Research, Inc.
    5. Winand Emons, 2013. "Incentive-Compatible Reimbursement Schemes for Physicians," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 169(4), pages 605-620, December.
    6. Julien Mousquès & Thomas Renaud & Olivier Scemama, 2008. "A refutation of the practice style hypothesis: the case of antibiotics prescription by French general practitioners for acute rhinopharyngitis," Working Papers DT18, IRDES institut for research and information in health economics, revised Oct 2008.
    7. Victor R. Fuchs & Mark B. McClellan & Jonathan S. Skinner, 2004. "Area Differences in Utilization of Medical Care and Mortality among U.S. Elderly," NBER Chapters,in: Perspectives on the Economics of Aging, pages 367-414 National Bureau of Economic Research, Inc.
    8. Grytten, Jostein & Sorensen, Rune, 2003. "Practice variation and physician-specific effects," Journal of Health Economics, Elsevier, vol. 22(3), pages 403-418, May.
    9. Troels Kristensen & Kim Olsen & Henrik Schroll & Janus Thomsen & Anders Halling, 2014. "Association between fee-for-service expenditures and morbidity burden in primary care," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 15(6), pages 599-610, July.
    10. Mickael Bech & Jørgen Lauridsen, 2009. "Exploring spatial patterns in general practice expenditure," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 10(3), pages 243-254, July.
    11. Tor Iversen & Hilde Lurås, 2012. "Capitation and Incentives in Primary Care," Chapters,in: The Elgar Companion to Health Economics, Second Edition, chapter 26 Edward Elgar Publishing.
    12. Mousquès, Julien & Renaud, Thomas & Scemama, Olivier, 2010. "Is the "practice style" hypothesis relevant for general practitioners? An analysis of antibiotics prescription for acute rhinopharyngitis," Social Science & Medicine, Elsevier, vol. 70(8), pages 1176-1184, April.
    13. Bech, Mickael & Lauridsen, Jørgen, 2008. "Exploring the spatial pattern in hospital admissions," Health Policy, Elsevier, vol. 87(1), pages 50-62, July.
    14. Corallo, Ashley N. & Croxford, Ruth & Goodman, David C. & Bryan, Elisabeth L. & Srivastava, Divya & Stukel, Therese A., 2014. "A systematic review of medical practice variation in OECD countries," Health Policy, Elsevier, vol. 114(1), pages 5-14.
    15. Mangham-Jefferies, Lindsay & Hanson, Kara & Mbacham, Wilfred & Onwujekwe, Obinna & Wiseman, Virginia, 2014. "What determines providers' stated preference for the treatment of uncomplicated malaria?," Social Science & Medicine, Elsevier, vol. 104(C), pages 98-106.
    16. Fattore, Giovanni & Frosini, Francesca & Salvatore, Domenico & Tozzi, Valeria, 2009. "Social network analysis in primary care: The impact of interactions on prescribing behaviour," Health Policy, Elsevier, vol. 92(2-3), pages 141-148, October.
    17. Lippi Bruni, Matteo & Nobilio, Lucia & Ugolini, Cristina, 2009. "Economic incentives in general practice: The impact of pay-for-participation and pay-for-compliance programs on diabetes care," Health Policy, Elsevier, vol. 90(2-3), pages 140-148, May.
    18. Ozegowski, Susanne & Sundmacher, Leonie, 2014. "Understanding the gap between need and utilization in outpatient care—The effect of supply-side determinants on regional inequities," Health Policy, Elsevier, vol. 114(1), pages 54-63.
    19. Gusmano, Michael K. & Weisz, Daniel & Rodwin, Victor G. & Lang, Jonas & Qian, Meng & Bocquier, Aurelie & Moysan, Veronique & Verger, Pierre, 2014. "Disparities in access to health care in three French regions," Health Policy, Elsevier, vol. 114(1), pages 31-40.

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