Physicians' engagement in dual practices and the effects on labor supply in public hospitals: results from a...

Physician dual practice, a combination of public and private practice, has attracted attention due to fear of reduced work supply and a lack of key personnel in the public system, increase in low priority treatments, and conflicts of interest for physicians who may be competing for their own patients when working for private suppliers. In this article, we analyze both choice of dual practice among hospital physicians and the dual practices' effect on work supply in public hospitals.

The sample consisted of 12,399 Norwegian hospital physicians working in public hospitals between 2001 and 2009. We linked hospital registry data on salaries and hospital working hours with data from national income and other registries covering non-hospital income, including income from dual work, cohabiting status, childbirths and socioeconomic characteristics. Our dataset also included hospital variables describing i.e. workload. We estimated odds ratio for choosing dual practice and the effects of dual practice on public working hours using different versions of mixed models.

The percentage of physicians engaged in dual practice fell from 35.1% for men and 17.6% for women in 2001 to 25.0% and 14.2%, respectively, in 2009. For both genders, financial debt and interest payments were positively correlated and having a newborn baby was negatively correlated with engaging in dual practice. Larger family size and being cohabitating increased the odds ratio of dual practice among men but reduced it for women. The most significant internal hospital factor for choosing dual practice was high wages for extended working hours, which significantly reduced the odds ratio for dual practice. The total working hours in public hospitals were similar for both those who did and did not engage in dual practice; however, dual practice reduced public working hours in some specialties.

Economic factors followed by family variables are significant elements influencing dual practice. Although our findings indicate that engagement in dual practice by public hospital physicians in a well-regulated market may increase the total labor supply, this may vary significantly between medical specialties.