An Analysis of the Supplier-Induced Demand in the Hospital sector: Switching Regime Estimates for Belgium
No 1991006, Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)
This paper attempts to provide some new evidence of the so called 'supplier-induced demand effect' in the hospital sector. By means of an endogenous regime switching model, the maximum likelihood estimates for Belgium are consistent with the idea that hospitals in excess-capacity actually increase the average length of stay of their patients, above what should have been if one considers only the 'patients' case-mix' of the hospitals. The model also includes the possibility of spatial spillovers which should appear as a consequence of this disequilibrium regimes. Those spillovers not only provide a better explanation of the patients dispersion among hospitals. They also decrease the 'supplier-induced demand' effect generated by hospitals by reducing the original extent of the excess-supplied situation. The model seems robust with regard to some consistency tests we have carried out. ; e.g., it is shown that hospital sectors in predominant excess-demand (resp., excess-supply) are generally those where the net emigration balance is positive, (resp., negative).
Keywords: health services; hospitals; economic models (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:1991006
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