Scandinavian Working Papers in Economics

HERO Online Working Paper Series,
University of Oslo, Health Economics Research Programme

No 2008:3: Does quality influence choice of general practitioner? An analysis of matched doctor-patient panel data

Erik Biørn () and Geir Godager ()
Additional contact information
Erik Biørn: Department of Economics, Postal: University of Oslo,, P.O. Box 1095 Blindern, 0317 Oslo, Norway
Geir Godager: Institute of Health Management and Health Economics, Postal: P.O. Box 1089 Blindern, NO-0317 Oslo, Norway

Abstract: The impact of quality on the demand facing health care providers has important implications for the industrial organization of health care markets. In this paper we study the consumers' choice of general practitioner (GP) assuming they are unable to observe the true quality of GP services. A panel data set for 484 Norwegian GPs, with summary information on their patient stocks, renders the opportunity to identify and measure the impact of GP quality on the demand, accounting for patient health heterogeneity in several ways. We apply modeling and estimation procedures involving latent structural variables, inter alia, a LISREL type of model,is used. The patient excess mortality rate at the GP level is one indicator of the quality. We estimate the effect of this quality variable on the demand for each GP's services. Our results, obtained from two different econometric model versions, indicate that GP quality has a clear positive effect on demand.

Keywords: GP services; Health care quality; Health care demand; Latent variables; LISREL; Panel data; Norway

JEL-codes: C23; C33; D83; H51; H75; I11; I18

40 pages, June 2, 2009

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