Spatial dependence in physicians’ prices and additional fees: Evidence from France

Benjamin Montmartin and Marcos Herrera-Gómez

Journal of Health Economics, 2023, vol. 88, issue C

Abstract: Concerns about healthcare affordability have grown in France as physician additional fees have increased threefold in the last 20 years. In this paper, we develop an innovative structural spatial framework to provide new insights into free-billing physician pricing behavior. We empirically test a closed-form solution of a circular city model with heterogeneous physicians by using a unique geolocalized database that covers more than 4000 private practitioners in three specializations (ophthalmology, gynecology and pediatrics). We highlight a positive spatial dependence in prices for all specialties that increases with physician density. This result reflects markets in which both prices are strategic complements and incentives for quality competition are low. We also find evidence of potential noncompetitive behavior for two specialties for which price and competition measures are positively related. These findings in the context of a growing spatial concentration of free-billing physicians emphasize key mechanisms explaining the increasing of additional fees.

Keywords: Spatial dependence; Strategic complementarity; Additional fees; Competition; Differentiation (search for similar items in EconPapers)
JEL-codes: C21 H51 I11 I18 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:88:y:2023:i:c:s0167629623000012

DOI: 10.1016/j.jhealeco.2023.102724

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