Supplier-Induced Demand for Chronic Disease Care in Japan: Multilevel Analysis of the Association between Physician Density and Physician-Patient Encounter Frequency

Background: There are currently large regional variations in the frequency of physician-patient encounters for the treatment of chronic lifestyle diseases in Japan. These variations may be influenced by competition among physicians, and supplier-induced demand (SID) in health care can occur when physicians manipulate their patients’ demand for medical services to increase the use of health care. Objectives: To analyze patient data to investigate the presence of SID in the treatment of chronic diseases at the regional level in Japan. Methods: We tested the hypothesis that clinic and hospital physicians in areas of high competition (high physician density) are more likely to recommend a sooner follow-up consultation than do those in areas of lower competition (lower physician density). Using random-effects multilevel models, we analyzed patient survey data and administrative claims data to estimate the effects of physician density on encounter frequency and medical charges. In the analysis of claims data, we used ee front matter Copyright & 2015, International S