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An empirical study of the physician-induced demand hypothesis - the cost function approach to medical expenditure of the elderly in Japan
Author(s)Nobuyuki Izumida, Hiroo Urushi, Satoshi Nakanishi
Corporate AuthorNational Institute of Population and Social Security Research, Japan
Journal titleReview of Population and Social Policy, no 8, 1999
Pagespp 11-26
SourceNational Institute of Population and Social Security Research, 1-2-3 Kasumigaseki, Chiyoda-ku, Tokyo 100-0013, Japan.
KeywordsHealth services ; Costs [care] ; Doctors ; Japan.
AnnotationIncreased medical expenditures for older people have become a social problem in Japan. One of the most powerful arguments to explain this increase is the physician-induced demand hypothesis. According to this hypothesis, a physician can induce a patient to undergo more intensive medical treatment because he or she has more medical information than the patient. In this article, the authors adopt the expenditure function approach to examine this hypothesis. In this approach, the improvement of health due to medical treatment is adjusted in the model and the non-valid use of medical services can be measured. In addition, the possibility of substitution between hospital services and outpatient care is allowed for. The authors conclude that when the number of physicians per capita increases, the use of inpatient and outpatient services increases with statistical significance, respectively. The substitution between hospital services and outpatient services also exists. In addition, the demand for inpatient or outpatient services is significantly influenced by the self-payment price. (AKM).
Accession NumberCPA-000322203 A
ClassmarkL: QDC: QT2: 7DT

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