Main Results

increased a little for technical specialties), and neither did the number of years before establishing a practice. Figure 2.B.5also shows graphically that there is continuity around the threshold for these variables. All these checks confirm that we do not have evidence of manipulation.

both clinical and technical procedures. Those technical specialists, who were constrained by the reform to practice regulated fees, face much lower prices for procedures than they would as sector 2 physicians. Without any possibility of overbilling patients, the average price of procedures is 46% lower than the one they would face as sector 2 physicians. This huge price decrease is higher for technical procedures (-64% to -66%) than for clinical ones (-50%). Physicians strongly react to this price decrease by increasing their number of acts (+36 to +42%). This increase in activity is only due to the rise in the total number of technical procedures: +66 to +77%; on the other hand, the number of clinical procedures (i.e., consultations without any technical act) is not significantly different from what they would have provided as sector 2 physicians. It is important to note that technical procedures are always performed during a consult. When the physician makes a technical procedure, the NHI only charges the price of the technical procedure.

Therefore, the interpretation of our result is that physicians constrained to set regulated prices perform the same number of consultations without any technical act as they would in sector 2, but increase the number of consultations that include a technical act.

These technical procedures can be divided into two categories: non-surgical and surgical proce- dures. For dermatologists, surgical procedures include mostly biopsys and excisions of potential cancerous tumors. Non-surgical procedures include skin prick tests (that test for allergic reac- tions), verruca removal, the use of a laser to remove superficial skin lesions that do not need a complete excision, and a skin cancer screening using a dermoscopy to distinguish between a normal mole and a melanoma. In addition, most surgical procedures are performed after a non-surgical one (detection) in a following consult. Therefore, physicians have strong incentives to increase their number of non-surgical procedures to raise their number of surgical procedures later. Indeed, we observe (Table 2.D.2) that dermatologists constrained to charge regulated prices increased both kinds of technical procedures. Still, they increased the number of non- surgical ones by a higher amount (89 to 105%, compared to 66-71% for non-surgical ones). ENT physicians only perform non-surgical acts (for example, audiometric tonal and vocal testing and endoscopy of the nasal cavity...). However, they strongly increased their technical procedures (+89 to 122%). All these results are robust whatever the bandwidth (see Tables2.E.1,2.E.4and 2.E.5 in appendix E) and the use of control variables (see Table2.E.8).

This greater activity could reflect a previous rationing of demand, due to financial constraints:

because they charge patients lower fees, compliers may face greater demand than the one they would have in sector 2. Using the estimates presented in Table2.3, additional calculations show that 75% of the increase in total activity is due to the rise in the number of acts delivered to new patients, while 25% is due to an increase in the number of acts delivered to regular ones¹³. Regulated fees, therefore, increased physicians’ accessibility. However, only 48% of the increased number of technical procedures is due to the increased number of patients; 52% of these acts are therefore not justified and probably due to strategic behaviors of physicians to compensate for their reduced fees¹⁴.

13Technical specialists provide 1,473 more acts [(exp(0.36)-1)*3,399=1,473] than they would in sector 2 (3,399 being the average number of acts of technical specialists practicing in sector 2 in 1989). They also treat 743 more patients [(exp(0.28)-1)*2,301=743]. Given that they perform 1.5 act per patient, the increase in activity only due to the follow-up of new patients should be 1,114 more acts, i.e., 75% of their total increase in activity.

14Given that technical specialists perform on average 0.53 technical procedures per patient, they should provide

Table 2.4 investigates whether this increase in procedures, especially in technical procedures, could be due to changes in patients’ characteristics. This is not the case: the share of patients with chronic diseases, the percentage of low-income patients, and the structure per age of the patients are not significantly different from the one they would have under unregulated fees.

However, Table 2.4 also shows that the increase in the number of patients can be due to the combined effect of i) their lower prices; ii) their choice of location in areas where medical density, hence competition (either from sector 1 or sector 2 physicians) is lower.

Overall, dermatologists and ENT physicians constrained to charge regulated fees because of the reform perform more acts, primarily more technical procedures. Their income is similar to the one they would have had under unregulated fees but at the cost of a higher workload. Part of the increased activity (both in the total number of acts and in the number of technical procedures) is devoted to the follow-up of new patients, which is a sign of increased availability of care. However, about 25% of the increased number of acts and 52% of the increased number of technical acts are not justified by the increased number of patients. It may be a sign of supply-induced demand, with physicians reacting strongly to income effects. Note that the duration of consultations or the total work duration of the physicians is not available in our administrative data. Therefore, technical specialists who increased their number of acts either increased their total work duration (keeping constant the time of each consultation) or maintained it (by decreasing the length of each consultation). This distinction does not matter for our analysis. What matters more is the total number of acts that can be delivered to the population (i.e., the amount of care provided by more sector 1 instead of sector 2 physicians) and not the total number of hours they work.

5.1.3 Medical specialties

Results concerning the two medical specialties, pediatricians and psychiatrists, are presented in Table 2.3. Contrary to technical specialists, their activity is only composed of clinical acts (consultations): they have less latitude in the composition of their activity. Medical specialists constrained to charge regulated prices face a 33 to 38% decrease in their prices, i.e., a smaller drop than technical specialists. At the same time, those compliers do not perform more clinical acts than they would if they had started their practice in sector 2, and they do not see more patients.

Overall, this non-significant variation in their level of activity, combined with lower prices, led physicians constrained to practice in sector 1 because of the reform to earn significantly less than if they had practiced in sector 2 (fees are 38% to 54% lower). Results using different bandwidths (see Tables2.E.2,2.E.6and 2.E.7) or using control variables (Table2.E.8) confirm these results.

Recall that physicians are observed in 2008 and 2011. In 2011, 29% of psychiatrists and 33%

of pediatricians were practicing in sector 2. On the contrary, among technical specialties, it was the case for 57% of ENT physicians and 45% of dermatologists (DREES, 2019). Medical specialists compliers are, therefore, more likely than technical specialists compliers to practice around sector 1 physicians in 2011, and all the more so as they chose to locate in areas where medical density and the share of sector 2 physicians is also much lower than if they had started their practice in sector 2 (see Table 2.4). Sector 2 medical specialists practicing in the same

743*0.53=394 more technical acts. However, the number of technical acts increased by (exp(0.67)-1)*1224=820.

area as the compliers may have adapted their practice to the ones of sector 1 physicians over the years. Hence, in 2011, no difference was observed in the compliers’ care provision, contrary to what they would have done in sector 2. This long-term effect needs to be investigated in more detail; this will be done in the next section. Another interpretation could be that pediatricians and psychiatrists have specific intrinsic characteristics that make them choose these specialties, which are among the lowest-paid ones. Given that the characteristics of all specialties (especially the level of income) are standard information for students in medicine when they choose their specialty, they made a fully informed choice. This means that, on average, they have less interest in monetary considerations than other doctors, hence their absence of any strategic response to price regulation.

5.1.4 General Practitioners

Results for GPs are close to results found in Coudin et al.[2015] who use a similar dataset, but only for the year 2008, and with a slightly different methodology¹⁵. We find that the decrease in prices (-36%) is compensated by a higher number of consultations (+47 to +55%)¹⁶They also see more patients (+36 to +38%). Overall, their fees are similar to what they would have earned if they had not been constrained to practice regulated fees but at the expense of a greater workload.

Suppose we perform the same kind of calculations as for technical specialties. In that case, we show that 67% of the additional activity is devoted to new patients, hence demonstrating the greater accessibility of sector 1 physicians for the population again¹⁷. This is a strong result given the key role of GPs - as “gatekeepers” - for the organization of ambulatory care in France. The remaining 27% of this increased activity could reflect, as for technical specialists, some supply- induced demand, i.e., an increase in the number of procedures devoted to regular patients, not necessarily justified in terms of health gains.

One potential explanation for the supply-demand behavior of GPs is that, contrary to specialists, they do not locate more in areas where medical density is lower, compared to what they would have done under unregulated fees (see Table2.4). In addition, contrary to specialists, part of their reaction regarding the provision of care may be explained by the higher degree of competition they face. As they are paid under a FFS scheme, their fees are strongly related to the number of acts they perform and, therefore, to the degree of competition they are exposed to.