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Department Seminar: Wanda MIMRA (ETH Zurich)

Abstract

Information problems are a defining characteristic in health care markets. Despite their importance, there is little direct evidence of the impact of information problems between patients and physicians on the quality of treatment.
Furthermore, the role of market characteristics such as competition intensity is not well understood. In this paper, we present the results from a field experiment in the market for dental care. A test patient who does not require
treatment is sent to 180 dentists to receive treatment recommendations. In the experiment, we vary two factors: First, the extent of the information asymmetry between patient and dentist. Second, we vary the perceived socioeconomic
status (SES) of the test patient. Furthermore, we collect data to construct several measures of short- and long-term demand and competition as well as dentist and practice characteristics. We find that the patient receives an overtreatment recommendation in more than every fourth visit.
A low short-term demand, indicating excess capacities, leads to significantly more overtreatment recommendations. Physician density and their price level however do not have a significant effect on overtreatment. Furthermore, we observe significantly less overtreatment recommendations for the patient with higher compared to lower SES under standard information, indicating a complex role of socioeconomic status. More patient information however does not significantly affect overtreatment.

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