Scandinavian Working Papers in Economics

Discussion Paper Series in Economics,
Norwegian School of Economics, Department of Economics

No 3/2017: Competition and physician behaviour: Does the competitive environment the propensity to issue sickness certificates?

Kurt R. Brekke (), Tor Helge Holmås (), Karin Monstad () and Odd Rune Straume ()
Additional contact information
Kurt R. Brekke: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH , Department of Economics, Helleveien 30, N-5045 Bergen, Norway
Tor Helge Holmås: Uni Research Rokkan Centre, Postal: Uni Research Rokkan Centre , Nygårdsgaten 112, N-5008 Bergen, Norway
Karin Monstad: Uni Research Rokkan Centre, Postal: Uni Research Rokkan Centre , Nygårdsgaten 112, N-5008 Bergen, Norway
Odd Rune Straume: University of Minho, Postal: University of Minho, Campus de Gualtar, 4710-057 Braga, Portugal

Abstract: Competition among physicians is widespread, but compelling empirical evidence on the impact on service provision is limited, mainly due to lack of exogenous variation in the degree of competition. 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. This allows us to observe the same GP in two different competitive environments; with competition (own practice) and without competition (emergency centre). Using rich administrative patient-level data from Norway for 2006-14, which allow us to estimate high-dimensional fi…xed-effect models to control for time-invariant patient and GP heterogeneity, we …nd that GPs with a fee-for-service (…fixed salary) contract are 11 (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’sick listing that is reinforced by …nancial incentives.

Keywords: Physicians; Competition; Sickness certification

JEL-codes: I11; I18; L13

38 pages, February 12, 2017

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