Hospital demand for physicians

Area of Science:

• Health Economics
• Hospital Management
• Physician Workforce Analysis

Background:

• Understanding the economic factors influencing physician demand is crucial for healthcare policy and hospital administration.
• Existing models often simplify physician-hospital relationships, failing to account for complexities like unobserved costs and physician mobility.

Purpose of the Study:

• To develop a generalized derived demand model for physicians that incorporates various hospital objectives (physician control, profit maximization, utility maximization).
• To analyze the implications of unobserved physician hiring costs, multi-hospital appointments, and physician heterogeneity on demand.
• To empirically estimate specialty-specific physician demand equations using historical hospital data.

Main Methods:

• Development of a theoretical derived demand model for physicians.
• Estimation of a system of specialty-specific demand equations using 1983 American Hospital Association data.
• Analysis of the model's consistency with empirical results.

Main Results:

• The empirical results align with the theoretical model's predictions.
• The study highlights the significance of factors such as unobserved prices and physician non-homogeneity.
• Evidence suggests a potential for reduced physician access to hospitals.

Conclusions:

• Physicians may need to be concerned about diminishing access to hospital facilities.
• The declining stock of hospitals could exacerbate issues related to physician access.
• The derived demand model provides a framework for understanding physician-hospital market dynamics.