We study the relationship between regulatory regimes and pharmaceutical firms' pricing strategies using a unique policy experiment from Norway, which in 2003 introduced a reference price (RP) system called "index pricing" for a sub-sample of off-patent pharmaceuticals, replacing the existing price cap (PC) regulation. We estimate the effect of the reform using a product level panel dataset, covering the drugs exposed to RP and a large number of drugs still under PC regulation in the time before and after the policy change. Our results show that RP significantly reduced both brand-name and generic prices within the reference group, with the effect being stronger for brand-names. We also identify a negative cross-price effect on therapeutic substitutes not included in the RP-system. In terms of policy implications, the results suggest that RP is more effective than PC regulation in lowering drug prices, while the cross-price effect raises a concern about patent protection.

Physicians are key personnel in a sector which is important due to its size as well as the quality of service it provides. We estimate the labor supply of physicians employed at hospitals in Norway, using personnel register data merged with other public records. A dynamic labor supply equation is estimated using a sample of 1303 male physicians observed over the period 1993-1997. The methods of estimation are GMM and system GMM. We reject the static model in favor of a dynamic model and obtain short run wage elasticities around 0.3. This is higher than previously estimated for physicians, in particular for those who are not self-employed.

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We study the impact of regulation on competition between brand-names and generics and pharmaceutical expenditures using a unique policy experiment in Norway, where reference pricing (RP) replaced price cap regulation in 2003 for a sub-sample of off-patent products. First, we construct a vertical differentiation model to analyze the impact of regulation on prices and market shares of brand-names and generics. Then, we exploit a detailed panel data set at product level covering several off-patent molecules before and after the policy reform. Off-patent drugs not subject to RP serve as our control group. We find that RP significantly reduces both brand-name and generic prices, and results in significantly lower brand-name market shares. Finally, we show that RP has a strong negative effect on average molecule prices, suggesting significant cost-savings, and that patients' copayments decrease despite the extra surcharges under RP. Terms of use: Documents inJEL-Code: I11, I18, L13, L65.

Acknowledging the necessity of a division of labour between hospitals and social care services regarding treatment and care of patients with chronic and complex conditions, is to acknowledge the potential conflict of interests between health care providers. A potentially important conflict is that hospitals prefer comparatively short length of stay (LOS) at hospital, while social care services prefer longer LOS all else equal. Furthermore, inappropriately delayed discharges from hospital, i.e. bed blocking, is costly for society. Our aim is to discuss which factors that may influence bed blocking and to quantify bed blocking costs using individual Norwegian patient data, merged with social care and hospital data. The data allow us to divide hospital LOS into length of appropriate stay (LAS) and length of delay (LOD), the bed blocking period. We find that additional resources allocated to social care services contribute to shorten LOD indicating that social care services may exploit hospital resources as a buffer for insufficient capacity. LAS increases as medical complexity increases indicating hospitals incentives to reduce LOS are softened by considerations related to patients’ medical needs. Bed blocking costs constitute a relatively large share of the total costs of inpatient care.

A shortage of nurses is currently a problem in several countries, and an important question is therefore how one can increase the supply of nursing labour. In this paper, we focus on the issue of nurses leaving the public health sector by utilising a unique data set containing information on both the supply and demand side of the market. To describe the exit rate from the health sector we apply a semi-parametric hazard rate model. In the estimations, we correct for unobserved heterogeneity by both a parametric (Gamma) and a non-parametric approach. We find that both wages and working conditions have an impact on nurses' decision to quit. Furthermore, failing to correct for the fact that nurses' income partly consists of compensation for inconvenient working hours results in a considerable downward bias of the wage effect. Copyright © 2002 John Wiley & Sons, Ltd.

a b s t r a c tWe study whether the use of monetary incentives might be counter-productive. In particular, we analyse the effect of fining owners of long-term care institutions who prolong length of stay at hospitals. Exploiting a unique natural experiment involving changes in the catchment areas of two large Norwegian hospitals, we find that hospital length of stay are longer in the hospital using fines to reduce length of stay compared with the hospital not using monetary punishment. We interpret these results as examples of monetary incentives crowding-out agents' intrinsic motivation, leading to a reduction in effort.

In Norway, as in many countries, the national insurance system is under economic stress from demographic change impacting on the pensions versus contributions balance, and an increasing number of disability and sickness benefit claimants. The general practitioner (GP) is responsible for assessing work capacity and issuing certificates for sick leave based on an evaluation of the patient. Although many studies have analyzed certified sickness absence and predictive factors, no studies assess its variation between patients, GPs or geographical areas within a multilevel framework. Using a rich Norwegian matched patient-GP data set and employing a multilevel random intercept model, the study attempts to disentangle patient, GP and municipality-level variation in the certified sickness absence length for Norwegian workers in 2003. We find that most observed patient and GP characteristics are significantly associated with the length of sick leave (LSL) and medical diagnosis is an important observed factor explaining certified sickness durations. However, 98% of the unexplained variation in the LSL is attributed to patient factors rather than influenced by variation in GP practice or differences in municipality-level characteristics. Our findings indicate that GPs practice variation does not matter much for the patients' LSL. Our results are compatible with a high degree of patient involvement in current general practice. Based on this understanding one may infer that GPs play an advocate role for their patients in Norway, where the patients' own wishes are important when decisions are made.

Shortage of nurses is a problem in several countries. It is an unsettled question whether increasing wages constitute a viable policy for extracting more labour supply from nurses. In this paper we use a unique matched panel data set of Norwegian nurses covering the period 1993-1998 to estimate wage elasticities. The data set includes detailed information on 19,638 individuals over 6 years totalling 69,122 observations. The estimated wage elasticity after controlling for individual heterogeneity, sample selection and instrumenting for possible endogeneity is 0.21. Individual and institutional features are statistically significant and important for working hours. Contractual arrangements as represented by shift work are also important for hours of work, and omitting information about this common phenomenon will underestimate the wage effect.