The Pricing of Physicians' Services

Stephen E. Margolis

Journal of Human Resources, 1983, vol. 18, issue 4, 592-608

Abstract: This paper provides a model of the pricing of a physician's output. Each medical specialty behaves as a cartel, choosing prices which maximize profits for a representative practitioner. Two assumptions distinguish the model from previous work, and generate key results: (1) Within specialties, all activities have the same price per unit of physician's time. (2) For physicians, there are no artificial barriers to entry into specialty practice. The model implies a "surplus" of surgeons, an outcome which has been observed in the medical literature. Additional empirical tests are provided.

Date: 1983
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Persistent link: https://EconPapers.repec.org/RePEc:uwp:jhriss:v:18:y:1983:i:4:p:592-608

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