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Centre for Transformative Innovation & Swinburne Law School: Research Seminar

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Date: Thursday 2 February 2017
Venue: Penang Conference Room, Level 3, Library Building, Swinburne University of Technology, Hawthorn Campus

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Competition in the market for medical specialists

Dr Susan Johanna Mendez, Melbourne Institute of Applied Economic and Social Research


Despite an increasing number of new specialists doctors entering the workforce and the high concentration in their market (over 85% of all specialists are located in major cities), bulk billing rates for services provided by specialists are very low (only 30%). Various reasons contribute to high prices, for instance medical specialists in Australia provide services in a market where prices are unregulated; they are more likely to operate their private rooms adjacent to hospitals or in affluent areas, where patients tend to have additional private insurance coverage; and patient’s preferences for prices, waiting times and quality of care may be less important in this market because they often rely on their GPs’ referral when seeing a specialist. GPs acting as gatekeepers create entry barriers for new specialists that contribute to an increase in market power.

The aim of this research is to investigate the determinants of prices charged and bulk-billing rates provided by medical specialists in Australia. We discuss and examine empirically some aspects of competition between specialists, including densities of other specialists and GPs in small areas, distances between GPs and specialists, and between specialists in the same specialty, and also examine referral networks proxied by medical school graduation cohorts. We use detailed individual doctor level panel data on a representative sample of around 4,000 medical specialists from the Medicine in Australia: Balancing Employment and Life (MABEL) survey.

About the speaker

Susan is a Research Fellow in the Health Economics research program at the Melbourne Institute of Applied Economic and Social Research. Before joining the Institute in 2014, she was a Research Associate at the Chair for Entrepreneurship at the University of Zurich, where she completed her doctoral studies in Management and Economics. Her research interests include empirical industrial organization, health economics, and regulation and competition policy.

This research seminar is brought to you by Swinburne Law School and the Centre for Transformative Innovation. Join our monthly seminar series - check the Faculty of Business and Law events page for future seminars.

Contact Information: Julien Brailly
Email: Tel: +61 3 9214 8991