Abstract
We study implications of a change in the payment scheme for radiology providers in Norway that was implemented in 2008. The change implies reduced fee-for-service and increased fixed budget for a contracted volume of services. A consequence of the change is that private providers have less incentive to conduct examinations beyond the contracted volume. Different from the situation observed before the change in 2008, the volume is no longer determined by the demand side, and a rationing of the supply occurs. We employ data on radiological examinations initiated by GPs’ referrals. We apply monthly data at the physician-practice level for 2007–2010. The data set is unique because it includes information about all GPs in the Norwegian patient-list system. The results indicate that private providers conducted fewer examinations in 2008–2010 compared with previous periods and that public hospitals did either the same volume or more. We find that GPs who operate in a more competitive environment experienced a greater reduction in magnetic resonance imaging, both performed by private providers and in total for their patients. We argue that this result supports a hypothesis that patients with lower expected benefits are rationed. Hence, rationing from the supply side might supplement GP gatekeeping.
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Notes
To simplify, we set the copayment for patients covered by NIS equal to zero.
We cannot disregard that the contracted volume equals the demanded volume. In that case, the decline in p would have no effect on production. Because of the RHA’s interest in cost control, we assume that the contracted volume is smaller than the total number of referrals.
Since we assume that the waiting time is equal across providers in equilibrium, we do not need to consider the volume of each provider separately.
In the term radiology, we include all modalities: X-ray, ultrasound, magnetic resonance imaging (MRI) and computerized axial tomography (CAT scan).
Iversen and Ma (2011) made use of data for 2004–2007. Unfortunately, due to changes in data specification beyond our control, this data set cannot be merged with the present data set for 2007–2010. Accordingly, we have a shorter period prior to the reform than we would have preferred.
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Iversen, T., Mokienko, A. Supplementing gatekeeping with a revenue scheme for secondary care providers. Int J Health Econ Manag. 16, 247–267 (2016). https://doi.org/10.1007/s10754-016-9188-2
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DOI: https://doi.org/10.1007/s10754-016-9188-2