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Are physician fees responsive to competition?

Choné, P., Elise Coudin and A. Pla
Authors registered in the RePEc Author Service: Philippe Choné

Health, Econometrics and Data Group (HEDG) Working Papers from HEDG, c/o Department of Economics, University of York

Abstract: We assess the extent to which specialist doctors respond to local competition when setting prices (including extra-billings) in a fee-for-service system. We use an exhaustive panel data set to estimate physician reaction functions, exploiting exogenous changes in medical density and labor supply to identify the effects of local market structure and competitors' prices. We find that fees are strategic complements and decrease with physician density. Our results are consistent with a static competition model where patient choice is based on distance, price and observable physician characteristics and doctors have standard consumption-leisure preferences. Finally, we examine how the presence of physicians subject to full price regulation affects strategic interactions.

Keywords: fee-for-service; local competition; price competition; physicians' labor supply; extra billings (search for similar items in EconPapers)
JEL-codes: I11 J22 L11 (search for similar items in EconPapers)
Date: 2014-08
New Economics Papers: this item is included in nep-com and nep-hea
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Persistent link: https://EconPapers.repec.org/RePEc:yor:hectdg:14/20

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