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Market Conditions and General Practitioners’ Referrals

  • Iversen, Tor

    ()

    (Institute of Health Management and Health Economics)

  • Ma, Albert

    ()

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

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.

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File URL: http://www.hero.uio.no/publicat/2009/2009_8.pdf
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Paper provided by Oslo University, Health Economics Research Programme in its series HERO On line Working Paper Series with number 2009:8.

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Length: 31 pages
Date of creation: 14 Dec 2009
Date of revision:
Handle: RePEc:hhs:oslohe:2009_008
Contact details of provider: Postal: HERO / Institute of Health Management and Health Economics P.O. Box 1089 Blindern, N-0317 Oslo, Norway
Phone: 2307 5309
Fax: 2307 5310
Web page: http://www.hero.uio.no/eng.htmlEmail:


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