ABSTRACT
Introduction The interpretation of a positive relationship between the physician density in an area and the volume of medical care provision is a controversial issue. Some authors interpret the relationship as a support of income-motivated behaviour (induced demand) among physicians, while others emphasize the importance of patient-initiated services because of better accessibility to physicians. In this chapter we argue that micro-data describing whether a physician has obtained his optimal number of patients are essential for the detection of income-motivated behaviour among general practitioners (GPs). Our approach may be seen in relation to the literature review provided in Scott and Shiell (1997). They classify empirical studies of physicians’ induced demand according to the kind of data that is used. The first period of research, during the 1970s, is characterized by studies using aggregate utilization data. In these studies the effect of demand creation is difficult to separate from the effect of better access. In the second period, the 1980s, studies often use service provision data at the individual physician level, mixed with aggregate area-level explanatory variables, such as physician density. These studies employ data with an hierarchical structure without taking the possible correlation between error terms into account. Scott and Shiell (1997) improve the methods of earlier studies by taking account of the hierarchical structure of data. They find a positive relationship between physician density and the volume of physician-initiated service provision measured by the probability of a follow-up visit.
