Competition and physician behaviour: Does the competitive environment affect the propensity to issue sickness...

Competition among physicians is widespread, but compelling empirical evidence on its impact on service provision is limited, mainly due to endogeneity issues. In this paper we exploit that many GPs, in addition to own practice, work in local emergency centres, where the matching of patients to GPs is random. The same GP is observed both with competition (own practice) and without (emergency centre). Using high-dimensional fixed-effect models, we find that GPs with a fee-for-service (fixed-salary) contract are 12 (8) percentage points more likely to certify sick leave at own practice than at the emergency centre. Thus, competition has a positive impact on GPs' sicklisting that is strongly reinforced by financial incentives.