Induced Physician-Induced Demand

Kei Ikegami, Ken Onishi and Naoki Wakamori
Additional contact information
Kei Ikegami: Graduate School of Economics, The University of Tokyo
Ken Onishi: Federal Reserve Board

No CIRJE-F-1149, CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo

Abstract: Physicians may change their practices when introducing advanced medical equip-ment, and, in particular, they tend to overuse it. We investigate further in efficiency arising from physicians at surrounding hospitals. Using the panel data on the Japanese hospitals, we find that there exists a business-stealing effect: Hospitals lose their patients because of MRI adoption by nearby public hospitals, and, to compensate for the loss of patients, physicians take more MRI scans per patient. Our results suggest that the decision to adopt medical equipment needs to be made collectively rather than individually to avoid not only excessive adoption but also further physician-induced demand.

Pages: 33 pages
Date: 2020-04
New Economics Papers: this item is included in nep-com and nep-hea
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Related works:
Journal Article: Competition-driven physician-induced demand (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:tky:fseres:2020cf1149

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