Specialization and competition in dental health services

The number of specialists within dental health services has increased over the last few years. This raises the issue of how the services should be organized and funded. We describe the effect of one way of organizing the services, which is by relying on competition. In Norway, some oral specialists face real competition with general dental practitioners for the same patients (prosthetists, periodontists and endodontists), while other specialists do not (orthodontists and oral surgeons). The latter specialists have skills that give them exclusive possibilities to practice their profession. We find that competition can be effective for the specialists who experience real competition with general dental practitioners for patients. In situations where real competition does not exist, specialists can obtain market power and raise their fees. Our results are based on an analysis of a representative set of data from general dental practitioners and specialists in Norway. The specialities in which practitioners can exercise market power raise challenges related to the type of public policy that can reduce this market power in an appropriate way, and without involving too large costs for the authorities.