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Prohibition of Balance Billing for CMU-C Beneficiaries in France: What Are the Consequences on Physicians’ Behaviour and Earnings?

Auteurs : Brigitte Dormont, Cécile Gayet (Dauphine Economics Laboratory. LEGOS. PSL, University of Paris Dauphine)

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Séminaire en français

Abstract. CMU-C is a means-tested program that provides free supplementary health insurance to low-income people in France. It was introduced in January 2000. To ensure access to care of CMU-C beneficiaries, the CMU-C law does not allow doctors to charge CMU-C patients balance billing. This creates a financial constraint for the physicians who can charge balance billing (“sector 2” physicians). Similarly, dentists’ rates are limited by ceiling prices when they receive CMU-C patients.

Our purpose is to evaluate the impact of admitting CMU-C patients on the earnings of private physicians and dentists and on their rates. Does the admittance of CMU-C beneficiaries entail a significant drop in average physician and dentist consultation fee? Or are they able to neutralise the price limitation by increasing balance billing charged to other patients ("cost-shifting" hypothesis)? Or can they induce demand and increase their volume of activity to counterbalance the price restriction?

We use longitudinal data recording the activity, fees, earnings and information on the patients of self-employed doctors and dentists in years 2005, 2008, 2011 and 2014. These data are drawn from an exhaustive administrative source and include 59,818 general practitioners, 27,164 specialists and 35,534 dentists. Our empirical strategy consists in estimating the impact of a change in the proportion of CMU-C patients share on the fees, volume of activity and balance billing of sector 2 physicians (who are constrained on their fees for CMU-C patients only), taking as a counterfactual sector 1 physicians (who are never allowed to charge balance billing). Our specifications include physician fixed effects and we use an instrumental variable estimator to take the non-exogeneity of the variable “proportion of CMU-C patients” into account.
 
 Our findings show that doctors do not compensate the loss of income due to the prohibition of balance billing with a cost-shifting (increase in balance billing for other patients), suggesting that they are constrained in their price setting by a situation of monopolistic competition. Otherwise, we find that admitting CMU-C beneficiaries never imply a decrease in physicians and dentists earnings. This is mostly due to supply-induced demand behaviour: the provision of more procedures compensates price restrictions.

Contact :

Suzanne Chriqui

chriqui@irdes.fr

Tél : 01 53 93 43 06

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