The present paper examines whether supplier-induced demand exists for primary physician services in Norway. The research design is adapted to the institutional setting of Norwegian primary physician services, where there is a fixed fee schedule. More than 50% of primary care physicians receive a payment for treatment from the National Insurance Administration on a fee-for-item basis. The results showed that increased competition, measured as a high physician:population ratio, led to a decline in the number of consultations per contract physician. However, the contract physicians in high physician density areas did not compensate for the lack of patients by providing more items of treatment in order to maintain their income. Contract physicians' revenue from items of treatment per consultation were unaffected both by physician density and by the number of consultations per contract physician. These results are further corroborated by data that showed that contract physicians' gross revenue and profits were declining functions of physician density. This paper argues that, from an efficiency point of view, a deregulated health care market with fixed fees may operate well.
The aim of the present study was to assess the effect of travel time, time spent on a waiting list and time spent in the waiting room on demand for dental services in Norway. The analysis was performed on two sets of national data from 1975 and 1985, and on one set of local data from 1987. The national data were representative of the non-institutionalized Norwegian population aged 20 yr and above. Travel time had an effect on demand in 1975, but not in 1985. Time spent on a waiting list had no opportunity cost, and did not influence demand. There was a statistically significant association between time spent in the waiting room and demand. However, this association disappeared when the effect of dental attendance pattern was controlled for. Regular attenders had shorter waiting times than those who were irregular attenders. This study has shown that factors such as presence of teeth, family income, and age are more important than travel time on demand for dental services.
A number of empirical studies have shown that there is a negative association between population:physician ratio and utilization of medical services. However, it is not clear whether this relationship reflects supplier-inducement, the effect of lower prices on patient demand, a supply response to variation in health status, or improved availability. In Norway, patient fees and state reimbursement fees are set centrally. Therefore, the correlation between utilization and population:physician ratio either reflects supplier-inducement, a supply response or an availability effect. We applied a theoretical model which distinguished between an inducement and an availability effect. The model was implemented on a cross-sectional data set which contained information about patient visits and laboratory tests for all fee-for-service primary care physicians in Norway. Since population:physician ratio is potentially endogenous, an instrumental variable approach is used. We found no evidence for inducement either for number of visits or for provision of laboratory services.