Regulation of tariffs and health care supply behaviour of general practitioners: the lessons of the sector 2 framework.

Summary While the prices charged by sector 1 doctors are fixed and regulated, sector 2 doctors are allowed to charge "tactfully" more for the same procedures. Since December 1, 1989, access to sector 2 has been restricted to former heads of clinics and hospital assistants. The purpose of this restriction on access to sector 2 was to regulate the practice of extra fees. This study uses this reform to evaluate empirically the impact of the contracting sector on the supply of care provided by doctors and its composition, as well as on their fees and income. The analysis focuses only on general practitioners, the main specialty affected by the reform. The results suggest a strong impact of tariff regulation on the supply of care. The significant reduction in the rates charged leads, for sector 1 GPs who would have liked to join sector 2, to a higher level of activity than would have been the case if they had actually been able to join sector 2. Men reacted more strongly than women: the increase in their activity was greater, with a significant increase in their income from practice. Price regulation leads to greater accessibility for the doctors concerned, as they see a greater number of patients. Male doctors also perform more on-call duty than they would have done if they had been contracted in sector 2. When their prices are regulated, doctors are also treating a greater number of patients and receive more lump-sum payments in addition to the fee-for-service payment for their private practice.