Fixed fees and physician-induced demand: A panel data study on French physicians

This paper investigates on the existence of physician‐induced demand (PID) for French physicians. The test is carried out for GPs and specialists, using a representative sample of 4500 French self‐employed physicians over the 1979–1993 period. These physicians receive a fee‐for‐services (FFS) paymen...

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Bibliographic Details
Published in:Health economics 2003-09, Vol.12 (9), p.741-754
Main Authors: Delattre, Eric, Dormont, Brigitte
Format: Article
Language:English
Subjects:
Ambulatory care
Cohort Studies
Economics, Medical
Fee-for-Service Plans - economics
Fees & charges
Fees, Medical - statistics & numerical data
France
French physicians
Generalized method of moments
GMM
Health Care Rationing - economics
Health economics
Health Manpower
Health Services Needs and Demand - statistics & numerical data
Humans
Models, Econometric
National Health Programs
panel data
physician-induced demand
Physicians
Physicians, Family - economics
Physicians, Family - statistics & numerical data
Practice Patterns, Physicians' - economics
Specialization
Studies
Supply & demand
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Summary:This paper investigates on the existence of physician‐induced demand (PID) for French physicians. The test is carried out for GPs and specialists, using a representative sample of 4500 French self‐employed physicians over the 1979–1993 period. These physicians receive a fee‐for‐services (FFS) payment and fees are controlled. The panel structure of our data allows us to take into account unobserved heterogeneity related to the characteristics of physicians and their patients. We use generalized method of moments (GMM) estimators in order to obtain consistent and efficient estimates. We show that physicians experience a decline of the number of consultations when they face an increase in the physician:population ratio. However this decrease is very slight. In addition, physicians counterbalance the fall in the number of consultations by an increase in the volume of care delivered in each encounter. Econometric results give a strong support for the existence of PID in the French system for ambulatory care. Copyright © 2003 John Wiley & Sons, Ltd.
ISSN:1057-9230
1099-1050
DOI:10.1002/hec.823