Prescribing behavior of General Practitioners: Competition matters

Abstract

Background: General Practitioners have limited means to compete. As quality is hard to observe by patients, GPs have incentives to signal quality by using instruments patients perceive as quality. Objectives: We investigate whether GPs exhibit different prescribing behavior (volume and value of prescriptions) when confronted with more competition. As there is no monetary benefit in doing so, this type of (perceived) quality competition originates from GPs satisfying patients' expectations. Method: We look at market level data on per capita and per contact number of items prescribed by GPs and the value of prescriptions for the Belgian market of General Practitioners. We test to which extent different types of variables explain the observed variation. We consider patient characteristics, GP characteristics, number and type of GP contacts and the level of competition. The level of competition is measured by GP density, after controlling for the number of GPs and a HHI. Results: We find that a higher number of GPs per capita results in a higher number of units prescribed by GPs, both per capita and per contact. We argue that this is consistent with quality competition in the GP market. Our findings reject alternative explanations of GP scarcity, availability effect in GP care consumption and GP dispersing prescription in time due to competition.

Exploring differences between public and private providers in primary care: findings from a large Swedish region

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Patient choice, entry, and the quality of primary care: Evidence from Swedish reforms

“…The study finds small increases in patient satisfaction but no strong indications that competition improves objective quality measures (e.g., avoidable hospitalisation rates). A related literature, which examines measures of opportunistic behavior rather than quality, indicates that competition makes GPs issue more sick leave certificates (Brekke, Holmås, Monstad, & Straume, ; ISF, ; Markussen & Røed, ), provide more (intense) treatment (Iversen & Lurås, ; Iversen & Ma, ), prescribe more drugs (Fogelberg, ; Kann, Biørn, & Lurås, ; Schaumans, ), and try to affect the risk‐adjustment factor to increase their capitation (Dackehag & Ellegård, ).…”

Spatial competition and quality: Evidence from the English family doctor market

“…In the main, this literature lacks the exogenous variation needed for causal inference, uses a very limited number of outcomes measures which may have ambiguous relation to quality, or analyses small area, rather than firm (physician practice) variation. Schaumans (2015) and Pike (2010) exploit only cross sectional variation. The former examines the effect of competition in the Belgian family doctor market on pharmaceutical prescriptions.…”