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Market conditions and general practitioners’ referrals

  • Ching-to Albert MA

    ()

    (Department of Economics, Boston University.)

  • Tor Iversen

    ()

    (Department of Health Management and Health Economics, University of Oslo, Oslo, Norway)

We study how market conditions influence referrals of patients by general practitioners (GPs).We set up a model ofGP referral for theNorwegian health care system, where a GP receives capitation payment based on the number of patients in his practice, as well as fee-for-service reimbursements. A GP may accept new patients or close the practice to new patients. We model GPs as partially altruistic, and compete for patients. We show that a GP operating in a more competitive market has a higher referral rate. To compete for patients and to retain them, a GP satisfies patients’ requests for referrals. Furthermore, a GP who faces a patient shortage will refer more often than a GP who does not. Tests with Norwegian GP radiology referral data support our theory.

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Paper provided by Boston University - Department of Economics in its series Boston University - Department of Economics - Working Papers Series with number WP2010-023.

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Length: 21 pages
Date of creation: Jan 2010
Date of revision:
Handle: RePEc:bos:wpaper:wp2010-023
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Web page: http://www.bu.edu/econ/

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