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Medical pricing decisions: Evidence from Australian specialists

Author

Listed:
  • Susan J. Méndez

    (Melbourne Institute: Applied Economic & Social Research, The University of Melbourne)

  • Jongsay Yong

    (Melbourne Institute: Applied Economic & Social Research, The University of Melbourne)

  • Hugh Gravelle

    (Centre for Health Economics, University of York, England)

  • Anthony Scott

    (Centre for Health Economics, Monash University)

Abstract

We examine the pricing behaviour of medical specialists in a setting where fees are unregulated and patients receive a fixed subsidy from the government. We use eight years of specialist-level panel data from the Medicine in Australia Balancing Employment and Life (MABEL) survey. We find that local competition is not associated with a specialist’s willingness to accept the fixed subsidy as full payment nor with the level of fee charged above the subsidy. Instead, we show that fees are associated with specialists’ personality traits. Specialists who score more highly on agreeableness are more likely to accept the government subsidy as full payment, while those who score more highly on conscientiousness and neuroticism are less likely to do so. Furthermore, higher neuroticism scores are associated with higher fees.

Suggested Citation

  • Susan J. Méndez & Jongsay Yong & Hugh Gravelle & Anthony Scott, 2024. "Medical pricing decisions: Evidence from Australian specialists," Melbourne Institute Working Paper Series wp2024n11, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    • Handle: RePEc:iae:iaewps:wp2024n11
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    File URL: https://melbourneinstitute.unimelb.edu.au/__data/assets/pdf_file/0010/5013991/wp2024n11.pdf
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    More about this item

    Keywords

    medical specialists; prices; fees; behaviour; competition;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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