SUPPLIER INDUCEMENT IN A PUBLIC-HEALTH CARE SYSTEM

The present paper examines whether supplier inducement exists for prim ary physicians' services in Norway. Our model assumes optimization beh aviour of the physician. The research design is adapted to the institu tional setting of Norwegian primary physician services, where there is a fixed fee schedule. According to our model, the physician has three choices: to ration services, to supply an optimal amount of services or to induce demand for services. The analyses revealed no indication of inducement with respect to physician-initiated visits. However, sup plier inducement effects were found for provision of laboratory tests.