The Relative Importance of Physician-Induced Demand in the Demand for Medical Care

A Systematic Review of Main Factors leading to Irrational Prescription of Medicine

“…Wilensky et al in 1983, reviewed the findings from a series of studies on induced demand from the national medical care expenditure survey of the national center for health services research. They reported that induced demand was due to factors as demand for medical care by patients, physician-to-population ratio, increasing physician-initiated visits, physician-initiated health services, reimbursement system, insurance reimbursements, insurance coverage, and the share of the bill paid outof-pocket by the patient (12).…”

“…However, because of the patient's inadequate information about medicine, the physician has the possibility to influence both the kind of diagnosis and the number of health services provided, as well as possibly the number of visits (4)(5)(6)(7)(8). Physician-induced demand clearly implies an effort to persuade patients to overuse services (4,(9)(10)(11)(12). According to WHO reports, more than 50% of all medicines are inappropriately prescribed or sold, and nearly half of the patients do not take them appropriately (13).…”

“…Of these 594 papers, 26 papers were finally included. Table 1 displays summary information for each study (year, country/city, study design, and sample size) and Table 2 displays factors associated with irrational prescriptions of medicine.Four studies have been performed to investigate the physician-induced demand and its related factors (5,12,22,34). Wilensky et al in 1983, reviewed the findings from a series of studies on induced demand from the national medical care expenditure survey of the national center for health services research.…”

Countervailing Agency: A Strategy of Principaled Regulation under Managed Competition

“…The consequences depend on the nature of the incentives. Under fee-for-service payment systems, physicians face incentives to provide more treatment than their patients prefer (Woodward and Warren-Boulton 1984; Wilensky and Rossiter 1983;Dranove 1988), while capitation arrangements encourage physicians to provide less treatment (Woodward and Warren-Boulton 1984).…”

Impact Of Increasing Physician Supply: A Scenario for the Future

“…If increased supply reduces travel time and office waits, the total cost of care has fallen even if fees remain constant. 4 Empirical tests are clouded by physicians' ability to reclassify or unbundle services. Thus, a more general target income model posits physicians' influence over some combination of fees and demand.…”