Medical fee reforms, changes in medical supply densities, and supplier-induced demand: Empirical evidence from Japan

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Abstract

This study empirically investigates whether several negative income shocks to medical suppliers lead them to provide patients with unnecessary and/or excessive treatments. We use a variable that is objectively assessed as representing inducement: the amount of fraudulent and/or incorrect claims detected during the bill inspection processes. The empirical results indicate that medical suppliers increase inducement by 7.5 percent in response to a 1 percent medical fee reduction, but that changes in medical supply densities do not affect it. We also find that medical suppliers in more competitive areas are more sensitive to medical fee reductions and that suppliers in low-density areas tend to provide inducements in response to patient shortages.

Original languageEnglish
Pages (from-to)79-93
Number of pages15
JournalHitotsubashi Journal of Economics
Volume54
Issue number1
Publication statusPublished - 2013 Jun 1
Externally publishedYes

Keywords

  • Japanese national health insurance
  • Medical fee reforms
  • Medical supply densities
  • Reviews and checks of claim data
  • Supplier-induced demand

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics

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