IDEAS home Printed from https://ideas.repec.org/p/hhs/oslohe/2009_008.html
   My bibliography  Save this paper

Market Conditions and General Practitioners’ Referrals

Author

Listed:
  • Iversen, Tor

    () (Institute of Health Management and Health Economics)

  • Ma, Albert

    () (Department of Economics, Boston University, and University of Oslo)

Abstract

We study how market conditions influence referrals of patients by general practitioners (GPs). We set up a model of GP referral for the Norwegian 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 refers more. To retain patients in his practice, a GP satisfies patients’ requests for referrals. Furthermore, a GP who faces patient shortage will refer more often than a GP who has enough patients. More referrals may add to profits from future treatments. Using data of radiology referrals by GPs in Norway, we test and confirm our theory.

Suggested Citation

  • Iversen, Tor & Ma, Albert, 2009. "Market Conditions and General Practitioners’ Referrals," HERO On line Working Paper Series 2009:8, Oslo University, Health Economics Research Programme.
  • Handle: RePEc:hhs:oslohe:2009_008
    as

    Download full text from publisher

    File URL: http://www.hero.uio.no/publicat/2009/2009_8.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Fang, Hai & Rizzo, John A., 2009. "Competition and physician-enabled demand: The role of managed care," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 463-474, October.
    2. Paula González, 2004. "Should physicians' dual practice be limited? An incentive approach," Health Economics, John Wiley & Sons, Ltd., vol. 13(6), pages 505-524.
    3. GONZALEZ, Paula, 2003. "The "gatekeeping" role of general practitioners. Does patients' information matter ?," CORE Discussion Papers 2003089, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    4. Pedro Pita Barros & Xavier Martinez-Giralt, 2002. "Public and Private Provision of Health Care," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 11(1), pages 109-133, March.
    5. Pedro Pita Barros & Pau Olivella, 2005. "Waiting Lists and Patient Selection," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 14(3), pages 623-646, September.
    6. Gary Biglaiser & Ching-to Albert Ma, 2007. "Moonlighting: public service and private practice," RAND Journal of Economics, RAND Corporation, vol. 38(4), pages 1113-1133, December.
    7. Brekke, Kurt R. & Nuscheler, Robert & Straume, Odd Rune, 2007. "Gatekeeping in health care," Journal of Health Economics, Elsevier, vol. 26(1), pages 149-170, January.
    8. McGuire, Thomas G., 2000. "Physician agency," Handbook of Health Economics,in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 9, pages 461-536 Elsevier.
    9. Ching-To Albert Ma & Thomas G. Mcguire, 2002. "Network Incentives in Managed Health Care," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 11(1), pages 1-35, March.
    10. Geir Godager & Tor Iversen & Ching-To Ma, 2009. "Service motives and profit incentives among physicians," International Journal of Health Economics and Management, Springer, vol. 9(1), pages 39-57, March.
    11. Tor Iversen & Hilde Lurås, 2000. "The effect of capitation on GPs' referral decisions," Health Economics, John Wiley & Sons, Ltd., vol. 9(3), pages 199-210.
    12. James M. Malcomson, 2004. "Health Service Gatekeepers," RAND Journal of Economics, The RAND Corporation, vol. 35(2), pages 401-421, Summer.
    13. Stephen C. Earwicker & David K. Whynes, 1998. "General practitioners' referral thresholds and choices of referral destination: an experimental study," Health Economics, John Wiley & Sons, Ltd., vol. 7(8), pages 711-722.
    14. Glied, Sherry, 2000. "Managed care," Handbook of Health Economics,in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 13, pages 707-753 Elsevier.
    15. Paula González, 2010. "Gatekeeping versus direct-access when patient information matters," Health Economics, John Wiley & Sons, Ltd., vol. 19(6), pages 730-754.
    16. Allard, Marie & Jelovac, Izabela & Léger, Pierre Thomas, 2011. "Treatment and referral decisions under different physician payment mechanisms," Journal of Health Economics, Elsevier, vol. 30(5), pages 880-893.
    17. John List & Matti Liski, 2005. "Introduction," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 31(2), pages 121-121, June.
    18. Lise Rochaix, 1993. "Financial incentives for physicians: The Quebec experience," Health Economics, John Wiley & Sons, Ltd., vol. 2(2), pages 163-176, July.
    19. Propper, Carol & Burgess, Simon & Green, Katherine, 2004. "Does competition between hospitals improve the quality of care?: Hospital death rates and the NHS internal market," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1247-1272, July.
    20. Dusheiko, Mark & Gravelle, Hugh & Jacobs, Rowena & Smith, Peter, 2006. "The effect of financial incentives on gatekeeping doctors: Evidence from a natural experiment," Journal of Health Economics, Elsevier, vol. 25(3), pages 449-478, May.
    21. A. Michael Spence, 1975. "Monopoly, Quality, and Regulation," Bell Journal of Economics, The RAND Corporation, vol. 6(2), pages 417-429, Autumn.
    22. Croxson, B. & Propper, C. & Perkins, A., 2001. "Do doctors respond to financial incentives? UK family doctors and the GP fundholder scheme," Journal of Public Economics, Elsevier, vol. 79(2), pages 375-398, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kurt R. Brekke & Tor Helge Holmäs & Karin Monstad & Odd Rune Straume, 2017. "Competition and physician behaviour: Does the competitive environment affect the propensity to issue sickness certificates?," NIPE Working Papers 05/2017, NIPE - Universidade do Minho.
    2. repec:eee:jhecon:v:55:y:2017:i:c:p:244-261 is not listed on IDEAS
    3. Siciliani, Luigi & Chalkley, Martin & Gravelle, Hugh, 2017. "Policies towards hospital and GP competition in five European countries," Health Policy, Elsevier, vol. 121(2), pages 103-110.
    4. Drabik, Dusan & de Gorter, Harry & Timilsina, Govinda R., 2016. "Producing biodiesel from soybeans in Zambia: An economic analysis," Food Policy, Elsevier, vol. 59(C), pages 103-109.
    5. 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.
    6. Marie Allard & Izabela Jelovac & Pierre-Thomas Léger, 2014. "Payment mechanism and GP self-selection: capitation versus fee for service," International Journal of Health Economics and Management, Springer, vol. 14(2), pages 143-160, June.
    7. Godager, Geir & Iversen, Tor & Ma, Ching-to Albert, 2015. "Competition, gatekeeping, and health care access," Journal of Health Economics, Elsevier, vol. 39(C), pages 159-170.
    8. Brosig-Koch, Jeannette & Hehenkamp, Burkhard & Kokot, Johanna, 2016. "The effects of competition on medical service provision," Annual Conference 2016 (Augsburg): Demographic Change 145589, Verein für Socialpolitik / German Economic Association.
    9. Schaumans, Catherine, 2015. "Prescribing behavior of General Practitioners: Competition matters," Health Policy, Elsevier, vol. 119(4), pages 456-463.
    10. Dietrichson, Jens & Ellegård, Lina Maria & Kjellsson, Gustav, 2016. "Effects of Increased Competition on Quality of Primary Care in Sweden," Working Papers 2016:36, Lund University, Department of Economics.
    11. Brekke, Kurt R. & Holmås, Tor Helge & Monstad, Karin & Straume, Odd Rune, 2017. "Competition and physician behaviour: Does the competitive environment the propensity to issue sickness certificates?," Discussion Paper Series in Economics 3/2017, Norwegian School of Economics, Department of Economics.
    12. Tor Iversen & Anastasia Mokienko, 2016. "Supplementing gatekeeping with a revenue scheme for secondary care providers," International Journal of Health Economics and Management, Springer, vol. 16(3), pages 247-267, September.
    13. Markussen, Simen & Røed, Knut, 2017. "The market for paid sick leave," Journal of Health Economics, Elsevier, vol. 55(C), pages 244-261.
    14. Brekke, Kurt R. & Straume, Odd Rune, 2017. "Competition policy for health care provision in Norway," Health Policy, Elsevier, vol. 121(2), pages 134-140.

    More about this item

    Keywords

    Physician; service motive; profit motive; referral; radiology;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:oslohe:2009_008. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anbjørg Kolaas). General contact details of provider: http://edirc.repec.org/data/heuiono.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.