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Competition and dental services

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  • Jostein Grytten
  • Rune Sørensen

Abstract

Dental services for adults are different from all other Norwegian health services in that they are provided by private producers (dentists) who have full freedom to establish a practice. They have had this freedom since the end of World War II. A further liberalization of the market for dental services occurred in November 1995, when the so‐called normal tariff was repealed. The system changed from a fixed fee system to a deregulated fee system. In principle, the market for dental services for adults operates as a free competitive market, in which dentists must compete for a market share. The aim of this study was to study the short‐term effects of competition. A comprehensive set of data on fees, practice characteristics, treatment profiles and factors that dentists take into account when determining fees was analysed. The main finding was that competition has a weak effect. No support was found for the theory that the level of fees is the result of monopolistic competition or monopoly. The results also provided some evidence against the inducement hypothesis. At this stage, it is interesting to notice that dentists do not seem to exploit the power they have to control the market. One explanation, which is consistent with the more recent literature, is that physicians' behaviour to a large extent is influenced by professional norms and caring concerns about their patients. Financial incentives are important, but these incentives are constrained by norms other than self‐interest. The interpretation of the results should also take into account that the deregulation has operated for a short time and that dentists and patients may not yet have adjusted to changes in the characteristics of the market. Copyright © 2000 John Wiley & Sons, Ltd.

Suggested Citation

  • Jostein Grytten & Rune Sørensen, 2000. "Competition and dental services," Health Economics, John Wiley & Sons, Ltd., vol. 9(5), pages 447-461, July.
    • Handle: RePEc:wly:hlthec:v:9:y:2000:i:5:p:447-461
    DOI: 10.1002/1099-1050(200007)9:5<447::AID-HEC529>3.0.CO;2-A
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    Cited by:

    1. Whittaker, William & Birch, Stephen, 2012. "Provider incentives and access to dental care: Evaluating NHS reforms in England," Social Science & Medicine, Elsevier, vol. 75(12), pages 2515-2521.
    2. Eila Kankaanpää & Ismo Linnosmaa & Hannu Valtonen, 2011. "Public health care providers and market competition: the case of Finnish occupational health services," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 12(1), pages 3-16, February.
    3. Grytten, Jostein & Skau, Irene, 2020. "Educational inequalities in access to fixed prosthodontic treatment in Norway. Causal effects using the introduction of a school reform as an instrumental variable," Social Science & Medicine, Elsevier, vol. 260(C).
    4. Ketel, Nadine & Leuven, Edwin & Oosterbeek, Hessel & van der Klaauw, Bas, 2019. "Do Dutch dentists extract monopoly rents?," Journal of Health Economics, Elsevier, vol. 63(C), pages 145-158.
    5. Mauricea Lynch & Michael Calnan, 2003. "The changing public/private mix in dentistry in the UK–a supply‐side perspective," Health Economics, John Wiley & Sons, Ltd., vol. 12(4), pages 309-321, April.
    6. Anna-Lena Trescher & Stefan Listl & Onno Galien & Frank Gabel & Olivier Kalmus, 2020. "Once bitten, twice shy? Lessons learned from an experiment to liberalize price regulations for dental care," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 21(3), pages 425-436, April.
    7. Jostein Grytten & Irene Skau, 2009. "Specialization and competition in dental health services," Health Economics, John Wiley & Sons, Ltd., vol. 18(4), pages 457-466, April.

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