Competition, Prices and Quality in the Market for Physician Consultations

Hugh Gravelle, Anthony Scott (), Peter Sivey and Jongsay Yong

Melbourne Institute Working Paper Series from Melbourne Institute of Applied Economic and Social Research, The University of Melbourne

Abstract: Prices for consultations with General Practitioners (GPs) in Australia are unregulated, and patients pay the difference between the price set by the GP and a fixed reimbursement from the national tax-funded Medicare insurance scheme. We construct a Vickrey-Salop model of GP price and quality competition and test its predictions using a dataset with individual GP level data on prices, the proportion of patients who are charged no out-of-pocket fee, average consultation length, and characteristics of the GPs, their practices and their local areas. We measure the competition to which the GP is exposed by the distance to other GPs and allow for the endogeneity of GP location decisions with measures of area characteristics and area fixed-effects. Within areas, GPs with more distant competitors charge higher prices and a smaller proportion of their patients make no out-of-pocket payment. GPs with more distant competitors also have shorter consultations, though the effect is small and statistically insignificant.

Keywords: Competition; prices; quality; doctors (search for similar items in EconPapers)
JEL-codes: I11 I13 L1 (search for similar items in EconPapers)
Pages: 37pp
Date: 2013-06
New Economics Papers: this item is included in nep-com and nep-hea
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Competition, prices and quality in the market for physician consultations (2016)
Working Paper: Competition, prices, and quality in the market for physician consultations (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:iae:iaewps:wp2013n23

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