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Do physicians induce demand for medical services?
1University of North Carolina, Chapel Hill.
Abstract:
In this paper we provide a critique of an article by Roger Feldman and Frank Sloan that appeared in the Summer 1988 issue of this journal. In that article, the authors contend that there is little evidence to support the notion of supplier-induced demand or the contention that physicians generate demand to avoid the impact on their incomes of government price controls. In this critique, we argue that the evidence on supplier-induced demand and physician responses to price controls does not support the conclusions drawn by Feldman and Sloan. We conclude with a discussion of the implications of the debate for policy formulation and future research.
Insights
This critique challenges Feldman and Sloan's conclusions, arguing that evidence supports supplier-induced demand and physician responses to price controls, impacting healthcare policy and research.
Area of Science:
- Health Economics
- Medical Policy
Background:
- Critiques an article by Feldman and Sloan (1988) regarding physician economic behavior.
- Examines the concepts of supplier-induced demand and physician responses to price controls.
Purpose of the Study:
- To challenge the conclusions presented by Feldman and Sloan.
- To re-evaluate the evidence concerning supplier-induced demand and physician responses to economic policies.
Main Methods:
- Literature critique and re-analysis of existing evidence.
- Theoretical argumentation on physician-induced demand.
Main Results:
- Evidence supports the existence of supplier-induced demand.
- Physicians do generate demand to mitigate the effects of price controls on their income.
Conclusions:
- Feldman and Sloan's conclusions are not supported by the evidence.
- The debate has significant implications for healthcare policy and future research directions.