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Induced Physician-Induced Demand

Author

Listed:
  • Kei Ikegami

    (Graduate School of Economics, The University of Tokyo)

  • Ken Onishi

    (Federal Reserve Board)

  • Naoki Wakamori

    (Faculty of Economics, The University of Tokyo)

Abstract

Physicians may change their practices when introducing advanced medical equip-ment, and, in particular, they tend to overuse it. We investigate further in efficiency arising from physicians at surrounding hospitals. Using the panel data on the 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 needs to be made collectively rather than individually to avoid not only excessive adoption but also further physician-induced demand.

Suggested Citation

  • Kei Ikegami & Ken Onishi & Naoki Wakamori, 2020. "Induced Physician-Induced Demand," CIRJE F-Series CIRJE-F-1149, CIRJE, Faculty of Economics, University of Tokyo.
    • Handle: RePEc:tky:fseres:2020cf1149
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    Cited by:

    1. Chi Shen & Qiwei Deng & Sha Lai & Liu Yang & Dantong Zhao & Yaxin Zhao & Zhongliang Zhou, 2024. "New evidence on supplier-induced demand in China’s public tertiary hospitals: is the cost of hospitalization higher in the off-season?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 25(6), pages 951-962, August.
    2. Keon-Hyung Lee & Seunghoo Lim & Jieun Moon, 2022. "The Link Between Hospital Competition and Hospital Behaviors in Korea: Competitive Interorganizational Relations," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 23(1), pages 1-14, December.

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    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I19 - Health, Education, and Welfare - - Health - - - Other

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