| Number |
CREPEDP-88 |
| Publication Date |
December 2020 |
| Title |
Induced Physician-Induced Demand
|
| Author |
Kei Ikegami, Ken Onishi, and Naoki Wakamori
|
| Abstract |
Physicians may change their practices when introducing advanced medical equipment, and, in particular, they tend to overuse it. We investigate further inefficiency arising from physicians at surrounding hospitals. Using the panel data on Japanese hospitals, we find that there exists a business-stealing effect: Hospitals lose their patients because of MRI adoption by nearby public hospitals, and, to compensate for the loss of patients, physicians take more MRI scans per patient. Our results suggest that the decision to adopt medical equipment should be made collectively rather than individually to avoid not only excessive adoption but also further physician-induced demand.
|
| Keywords |
Physician-induced demand, Business-stealing effects, Externalities.
|
| Other information |
Paper in English (48 pages) |