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

Abstract: We study whether the information patients have about physician quality when they choose a physician, influences their probability of switching physicians. We also study whether a physician with unfavorable characteristics, as perceived by patients (ex post), can compensate for patient switching by providing a higher quantity of services to his patients. If so, a trade-off exists between quality characteristics and quantity of services in the physician services market. From panel data covering the entire population of Norwegian general practitioners, we find that information on physician quality, as perceived by patients, has a huge effect on the volume of patients switching physicians. We also find that although physicians who experience patient shortages in general provide more services to their patients than physicians who have enough patients, the increased level of service provision only has a very small impact on the number of patients who decide to switch. We conclude that a higher level of service provision does not seem to compensate for negative characteristics (patients’ impression of competence, empathy etc) of less popular physicians. We suggest that information about the volume of patient switching at the physician practice level should be made public.

Keywords: Switching; Economic motives; Capitation; General practice; Patient shortage

JEL-codes: H42; I11; I18

28 pages, June 2, 2009

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