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Does the Provision of Physician Services Respond to Competition?

Philippe Choné (), Elise Coudin and Anne Pla
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Philippe Choné: Centre for Research in Economics and Statistics (CREST).
Anne Pla: Ministry for Solidarity and Health, Direction de la Recherche, des Etudes, de l’Evaluation et des Statistiques.

No 2019-20, Working Papers from Center for Research in Economics and Statistics

Abstract: We assess the extent to which specialist physicians respond to local competition when deciding how much services to provide under a fee-for-service payment system. We use an exhaustive administrative panel data set of French physicians, and account for the dual nature of the regulatory environment, with part of the physicians being subject to price regulation. The activity of fee-regulated physicians depends only on their individual preferences, and is not affected by changes in their demand or competitive environment. By contrast, the prices charged by free-billing physicians decrease and their activity increases with physician density. Reaction functions are upward-slopping, with the quantities of services provided being strategic complements. Our findings are consistent with a static oligopoly model where the consumption-leisure preferences of doctors exhibit strong income effects.

Keywords: Fee-for-service payment; physician labor supply; income effects; spatial competition. (search for similar items in EconPapers)
JEL-codes: I11 L13 (search for similar items in EconPapers)
Pages: 74 pages
Date: 2019-10-17
New Economics Papers: this item is included in nep-com, nep-hea and nep-ind
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