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Does the Geographic Distribution of Physicians Reflect Market Failure?: An Examination of the New Zealand Experience, 1981–87

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  • J R Barnett

    (Department of Geography, University of Canterbury, Christchurch, New Zealand)

Abstract

Two main approaches have dominated economic theories of physician location; the traditional neoclassical view, in which it is assumed that the medical marketplace is truly competitive, and the provider-inducement model, in which it is predicted that more physicians increase rather than decrease the price of their services. In terms of their distributional implications both models suggest that an increased supply of physicians will initiate their diffusion, but at different rates. In this paper, the relevance of both models in terms of understanding the changing distribution of general practitioners in New Zealand between the years 1981 and 1987 is examined. Despite a substantial increase in the supply of physicians and their services, only modest improvements occurred in their regional distribution, and urban—rural differences got worse. Even conditions of near surplus within Auckland, New Zealand's largest metropolitan area, produced only marginal improvements in the availability of care. The results suggest that the traditional reliance of primary health-care policy in New Zealand on market-based solutions to improve geographic accessibility would seem to be misplaced and support current policy moves on the part of the state to regulate the distribution of physicians and their expenditure.

Suggested Citation

  • J R Barnett, 1993. "Does the Geographic Distribution of Physicians Reflect Market Failure?: An Examination of the New Zealand Experience, 1981–87," Environment and Planning A, , vol. 25(6), pages 827-846, June.
    • Handle: RePEc:sae:envira:v:25:y:1993:i:6:p:827-846
    DOI: 10.1068/a250827
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    References listed on IDEAS

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    1. Dennis, T., 1988. "Changes in the distribution of physicians in rural areas of Minnesota, 1965-85," American Journal of Public Health, American Public Health Association, vol. 78(12), pages 1577-1579.
    2. Weiner, Jonathan P. & Ferriss, David M., 1990. "GP budget holding in the United Kingdom: Learning from American HMOs," Health Policy, Elsevier, vol. 16(3), pages 209-220, December.
    3. M Barer & A Gafni & J Lomas, 1989. "Accommodating Rapid Growth in Physician Supply: Lessons from Israel, Warning for Canada," Centre for Health Economics and Policy Analysis Working Paper Series 2, Centre for Health Economics and Policy Analysis (CHEPA), McMaster University, Hamilton, Canada.
    4. Hicks, L.L., 1984. "Social policy implications of physician shortage areas in Missouri," American Journal of Public Health, American Public Health Association, vol. 74(12), pages 1316-1321.
    5. Anderson, Malcolm & Rosenberg, Mark W., 1990. "Ontario's underserviced area program revisited: An indirect analysis," Social Science & Medicine, Elsevier, vol. 30(1), pages 35-44, January.
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    Cited by:

    1. Dina Metwally, 2014. "Patients' Satisfaction with Primary Health Care in Egypt: Exploring the Gap between Rural and Urban Governorates," Journal of Social and Development Sciences, AMH International, vol. 5(4), pages 221-230.
    2. Toyokawa, Satoshi & Kobayashi, Yasuki, 2010. "Increasing supply of dentists induces their geographic diffusion in contrast with physicians in Japan," Social Science & Medicine, Elsevier, vol. 71(11), pages 2014-2019, December.

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