|Year : 2015 | Volume
| Issue : 1 | Page : 43-51
Factors affecting physicians' behaviors in induced demand for health services
Saeed Karimi1, Elahe Khorasani2, Mahmoud Keyvanara3, Somaye Afshari4
1 Department of Healthcare Management, Health Management and Economic Research Center, Isfahan University of Medical Sciences, Isfahan, Iran
2 Department of Healthcare Management, School of Management and Medical Informatics, Isfahan University of Medical Sciences, Isfahan, Iran
3 Department of Healthcare Management, Social Determinate of Health Research Center, Isfahan University of Medical Sciences, Isfahan, Iran
4 Department of Health Management and Economics, Tehran University of Medical Sciences, Tehran, Iran
|Date of Web Publication||19-Dec-2014|
Department of Healthcare Management, School of Management and Medical Informatics, Isfahan University of Medical Sciences, Isfahan
Source of Support: None, Conflict of Interest: None
Background and Aims : One of the controversial topics in the health economy is the theory of induced demand. Physicians as experts enjoy superior knowledge and information and can use their extra knowledge for persuading patients to use unnecessary healthcare. The objective of the present study is to investigate the factors affecting on physicians' behavior in induced demand using the experiences of the experts in the Isfahan University of Medical Sciences. Materials and Methods: The research is applied a qualitative method. Semi-structured interview was used for data generation. Participants in this study were people who had been informed in this regard and had to be experienced and were known as experts. Purposive sampling was done for data saturation. Seventeen people were interviewed, and criteria such as data "reliability of the information" and "stability" were considered. The anonymity of the interviewees was preserved. The data are transcribed, categorized and then used the thematic analysis. Results : In the present study, 41 sub-themes and three main themes were extracted. The three main themes included structural factors, factors due to statuses and behaviors, and economic factors. Each of these themes had sub-themes wh ich, for example, included the authority of physicians, competition among physicians, regulative and legal affairs, ethical factors, physician's customer focus, and physicians' tendency to maximizing profits. Conclusion : The results of the present study represent a comprehensive image of the reasons effective on physicians' behaviors in occurring induced demand. The most obvious findings of this research included structural factors, factors due to statuses and behaviors and economic factors. In the domain of structural factors; improper supervision of medical indications, expectations of physicians to activate other medical sections, physicians' independency of insurance contracts, in the domain of factors due to statuses and behaviors, physicians' authority in patients' compliance, competition among physicians, physicians' customer focus physicians' insufficient knowledge and skills, lack of commitment to ethics, and in the domain of economic factors; physician's tendency to maximizing profits, improper dependency of physicians and other health services providers are among the factors of occurring induced demand.
Keywords: Health services, induced demand, physicians
|How to cite this article:|
Karimi S, Khorasani E, Keyvanara M, Afshari S. Factors affecting physicians' behaviors in induced demand for health services. Int J Educ Psychol Res 2015;1:43-51
|How to cite this URL:|
Karimi S, Khorasani E, Keyvanara M, Afshari S. Factors affecting physicians' behaviors in induced demand for health services. Int J Educ Psychol Res [serial online] 2015 [cited 2021 May 7];1:43-51. Available from: https://www.ijeprjournal.org/text.asp?2015/1/1/43/147469
| Introduction|| |
One of the controversial topics in the health economy is the theory of induced demand  which occurs by utilizing more information advantage for patients and providing dubious too valuable healthcare for them. , Physicians' market and their services have been identified with asymmetric information between patients and physicians. A physician as an expert enjoys superior knowledge and information as well as he has a dichotomous role both as an advisor and provider of healthcare services to patients. , Evans started his seminal article titled as "supplier induced demand" with this manifest that "everyone knows that physicians have much leverage on the degree and pattern of medical healthcare." 
In medical markets, social norms for physicians are to enjoy considerable independence that they have in making decisions for patients' profits. However, there are many issues regarding how physicians really behave of which we are unaware. For example, how do physicians decide? What influence their behaviors? However, what we know is that there is very significant diversity in medical practices that seems that it signifies this concept that physicians do differently in visiting similar patients. ,
The hypothesis of physicians' induced demand investigates the relationship between physicians and patients. Since patients do not have sufficient information for determining the services that should be used, physicians can use their extra information and persuade patients to use unnecessary medicinal and healthcare.  Understanding the representative relationship between physicians and patients in the health economy is vital.  Medical services providers have great leverage on the degree and type of demanded medical healthcare. , Physicians act in practice as the goalkeepers for the whole health system. Their decisions determine when a patient should visit hospitals, what procedures should be conducted and what medicines should be prescribed for them. Other than the direct costs of physicians' services, they have significant leverage on other costs of heath sectors. 
A lot of studies confirm the existence of physicians' induced demand, most of them have investigated the factors of supply and demand for identifying it. ,,, The hypothesis of induced demand claims that physicians have induced demand in the conditions, which they experience little demand due to competition. This hypothesis is controversial because it concentrates on the motivations of physicians as providers of healthcare and advisers. It answers this question whether they as appropriate and complete agents act for their patients.  The vital role of healthcare providers in creating and controlling costs of the health sector has been recognized for a long time, and extensive studies have concentrated on this issue in many countries. 
Physicians' induced demand has been investigated in a lot of studies, but these researchers could not attain an absolute conclusion due to different reasons, including the quality of data and disputes over the theoretical framework and interpretations of the results. Investigating this issue regarding the different types of healthcare has an important role in the policymaking of the health system. Physicians' roles in induced demand should be extensively investigated to make the health system more efficient. In Iran's health system, physicians' induced demand may occur; at the present time, Iran's health system is faced with this issue that why such as any countries' health systems, the ground for occurring it is available such as the information asymmetry between physicians and patients. This phenomenon can engender a lot of challenges for the health system and more importantly for patients. Induced demand results in uncontrollable growth of costs, imposing unnecessary costs, and additional financial pressure on the insurers.  In his report, Saul states that a large number of patients are sent for financial gains, and these costs are $40,000 per each patient paid by Medicare. 
Izumida et al. evaluate the economic damages as very high due to induced demand at the national level particularly when the government subsidizes for medical services and medicines.  McGuire states that the hypothesis of induced demand covers a cost equal as 6.5% of the payments to physicians.  The findings of Keyvanara's study on the challenges occurring for patients indicate that patients' concerns without a real reason create a kind of social damage for them which can reduce their life quality. When the demand for services increases, as a consequence, costs increase, which finally the financial costs will be burdened on people and the contribution paid out of pockets will enhances. Even, it is possible that this issue would be continued to the level of crippling costs and draw patients below the poverty line. One of the intangible costs, which patients should pay is the waste of their time and precious lives in unnecessary services.  Tussing and Wojtowycz concluded that induced demand has important consequences for patients' economic welfare.  Dranove and Wehner indicated that physicians induce demands by suggesting the services incompatible with the objective of patients' cost-profit.  As a result, the present study is to investigate the factors affecting physicians' behaviors in induced demand using the ideas of the experts in the Isfahan University of Medical Sciences.
| Materials and Methods|| |
This qualitative research was performed in 2013 through deep interview. Participants were faculty members, doctors, hospital authorities, insurance managers, and researchers in the field of health economics with executive and management experience in the health system and familiar with induced demand. These people had several years of management experience in insurance companies, income and management section of hospitals, and vice president of health care supervision. The method of sampling was purposive. In other words, the interviewees were informed people with enough experience in this regard. Sample size fitted to the data saturation. Accordingly, 17 in-person interviews were conducted, recorded and written on article. The time of the interviews varied between 30 and 90 min.
For the validity of the research, the researcher conducted several interviews on a trial basis in advance, with the use of the advice, experience and assistance of the supervisors and the advisors. Then, for the data reliability, the veracity of the first interviews was considered by the supervisors and the advisors. When the revisions finished, the researcher began the work. For increasing the reliability, the data was extracted and referred to some participants and their viewpoint was considered. The criteria such as "data reliability, "assurance," and "stability" were also considered. Morality was also considered through gaining the interviewees' satisfaction. They were also informed that interviews are being recorded for the purpose of easy transcribing. Anonymity of the interviewees was preserved, and the participants were assured that the information is confidential.
The method of the analysis of the data is based on thematic analysis. Data analysis stages included extraction of data, writing them on article, storing them in the computer, immersion in the data, coding, reflexive remarks, marginal remarks, memoing, and developing preposition. In the first stage after each interview, the text was transcribed, then, typed and stored on a computer immediately. In the next stage, the interview texts were examined and reviewed several times so that the researchers dominated the data. In the third stage, the data was categorized into semantic units (code) in the form of sentences and paragraphs related to the main meaning. Semantic units were also reviewed several times. Then, an appropriate code was written down for each semantic unit. In a way that in each interview, sub-themes were separated, and then integrated, and reduced. At last, the main themes were recognized. Reflective and marginal rein fact, ideas and viewpoints emerging in the researcher's mind was recorded during the interview and analysis. These signs related the notes to the other parts of the data.
| Results|| |
In the present qualitative research, 41 sub-themes and three main themes were obtained [Figure 1]. These three main themes included structural factors, factors due to statuses and behaviors and economic factors. Regarding the participants' ideas, physicians have roles in induced demands, and sometimes they are referred to as the first stimuli induce demand. For example, a participant states regarding physicians' role in the induction of drug demand: "But physicians in their therapies induce drugs more than any other issues. 60-70% of the prescriptions for patients are unnecessary; in fact, those patients do not need medicine! Or they will improve with very simple drugs" (interview no. 12)!
Some factors related to physicians in inducing demand are structural ones. These factors are divided into sub-themes according to participants' ideas: "Physicians' freedom in providing different services, receiving a large number of patients more than physicians' ability and capacity, physicians' independency of insurance contracts, expected from to enable the rest of the medical practitioner, physician insecurities At the beginning of professional life, maintaining the position of doctors and physicians' undesirability to provide proper services for patients in the public sector." Participants state:
Physicians say, "I recognized this need and I prescribed so. So, the system and structure allows him to do so" (interview no. 2). "Even a lot of clinics … if a physician does not prescribe a lot of serum, medicine and ampoules, reject that physician" (interview no. 3). "If physicians had assurance, they never would have done so … now a physicians has educated for 12 years to hold a diploma and then 7 years to be a physician, then he has passed his project, done military services, now he is 30-year-old. Now, he is going to start his life …" (interview no. 3). "When a physician is asked, for example, to visit these 100 patients in just 6 h, then he has not enough time and because he cannot examine them appropriately, he creates induced demand for them" (interview no. 11). "A patient with an insurance ID has to pay 13,000 tomans to specialist physicians for being visited, and with free insurance, he should pay 15,000 tomans! They complain that whether with insurance or without insurance, there is no difference for some physicians" (interview no. 11).
Factors due to statuses and behaviors
In this regard, participants pointed out factors such as "physicians' authority in patients' compliance, competitions among physicians, the lack of a comprehensive medical examination, physicians' customer focus, physicians' insufficient knowledge and skill, regulative and legal affairs, and ethical factors." Participants declared that "when a physician is considered as an authority and specialty, so surely he is considered as a leverage or power source and this source causes the creation of demands" (interview no. 4). "Another issue is that there is completion among physicians themselves in attracting patients, in attracting patients' satisfaction" (interview no. 3).
For the lack of comprehensive medical examination, participants presented the following cases: "Inappropriate examination of patients, not allocating sufficient time for examination of patients, the lack of appropriate relationship between physicians and patients, the lack of observing appropriate procedure of diagnosing diseases, using the easiest and most expensive therapy and incorrect diagnosis of diseases." They pointed out that:
"A problem in our medical society is that the diagnosis is not correct! Physicians should listen to patients' accounts, physically examine them, control their medical tests, and propose differential diagnosis. At last, they should report the final diagnosis. These are not defined in our medical system at all" (interview no. 7)! "Another form is that physicians who have become well-known to some extent, and the number of their patients is large, do not examine patients at all" (interview no. 3). "Our medical groups do not enough time to explain all things to patients. They instead of sitting and speaking with patients and explaining to them, immediately prescribe them some medicines" (interview no. 15)! "It is possible that with a simple examination, a physician diagnoses whether it is foot fracture or not! However, he advises the patient to have a computed tomography scan" (interview no. 8 and 9)!
Regarding physicians' customer focus, participants pointed out the following issues: "Stimulating patients' preferences and attracting and maintaining patients." They state that "one of its reasons is that I am a physician who applies induced demand, for example, to you to attract patients. The issue that other physicians have not, I think, done" (interview no. 11). "It means that physicians prescribe more medical tests, and advise patients to visit them tomorrow and a day after tomorrow and so on, they want to increase the number of their visits and prescriptions, they want to attract patients by any means" (interview no. 4).
Physicians' insufficient knowledge and skills are one of the sub-themes of the reasons due to statuses and behaviors. Sometimes, physicians, due to failure to diagnose diseases, consciously or unconsciously, send patients to use services in which induced demand is unavoidable. Participants state "physicians do not diagnose disease sometimes, and they cannot explain this issue to patients, so they advise patients to perform some medical tests. It means that they send patients for something else" (interview no. 6). "Because they do not have sufficient knowledge and skills for diagnosis" (interview no. 4). "A lot of physicians have a good relationship, but this information is not applied" (interview no. 8 and 9).
According to participants, regulative and legal affairs include factors related to physicians' regulations and performances. In this section, participants proposed the following sub-themes: "Physicians' fear of regulatory authorities and patients' complaints and putting off patients to evade from possible errors." "Physicians know that the case is a simple torsion which can be treated by simple bandage, but due to increasing the rate of complaints, they prescribe so" (interview no. 11).
Participants presented ethical factors affecting induced demand by physicians in the form of following issues "physicians' easy goingness, being far from work conscience and commitment and physicians' lack of commitment to their real missions." "Another challenge is that physicians are not to pursue experimental work! They have become easygoing; they say as far as these technologies and facilities are available, why they run themselves into trouble" (interview no. 8 and 9)! "Some part of it is related to failure to fulfill job conscience" (interview no. 14).
Participants proposed economic factors encouraging physicians in the form of following sub-themes: "Physicians' tendency to maximize profits, earning more money, physicians' economic problems, compensating physicians' infringed rights, workflow of offices, improper dependency of physicians and other health services providers." By referring to the economic origin of inducing demand, a participant states: "See, the main factor of everything in a society refers to economy, the issue of money! The person who produces things like as such and advertises or induces them, his resource is money" (interview no. 10). "Physicians like to maximize their profits, that is, their objective is profit maximization" (interview no. 2). "Sometime the reason is that they think that it is their rights, that is, their rights are infringed somewhere and for compensating them, they use this method" (interview no. 2). "A physician wants his office to be prospered, which economic aspect is one of its issues, if there is extra activities, it is because of attracting patients to visit the same office for the next times" (interview no. 12).
Improper dependency of physicians and other service providers is among the factors affecting induced demand emphasized by most of the participants. This factor is presented in the form of the following sub-themes "improper relationship of physicians with institutes, commission and incentives to encourage physicians, physicians' financial partnerships with other medical and diagnostics institutions, putting pressure on physicians from various visitors, and using physicians as agents of selling services." Improper relationship of physicians with institutes, according to participants' ideas, are classified in the following themes: "Improper relationship of physicians with pharmaceutical companies, improper relationship of physicians with equipment companies, improper relationship of physicians with diagnostics companies." Participants declared that:
"As there is a kind of relationship among paraclinical institutes, it is possible that there is the relationship between pharmacies and physicians" (interview no. 12). "A relationship which is assumed to be unsound. There are companies that provide equipment and prepare them, and physicians can make the relationship with them" (interview no. 5). "Sometimes, there is a relationship between the providers of services and that section that provides paraclinical activities, say, laboratories or radiology. It is again observed that unnecessary graphs and medical tests for patients are prescribed by physicians" (interview no. 13). "Some incentives are provided which explicitly encourage physicians to send patients to specific laboratory" (interview no. 2). "They are financial partners. This causes that physicians induce some demands to patients. So, because physicians are shareholders, they induce patients some demands" (interview no. 11).
| Discussion|| |
The objective of the present study was to investigate physicians' role in induced demand using the ideas of the experts in the Isfahan University of Medical Sciences. The results obtained from this qualitative research were mentioned in the form of instances, and their validity is limited to the scope of the study. The present study was conducted in the Isfahan University of Medical sciences and insurance companies as well as physicians present in Isfahan. The obtained results cannot be generalized to all universities due to the different nature of different academic disciplines. The findings of the present study indicate that physicians have roles in induced demand, and sometimes they are considered as the first stimuli of induced demand because they have a direct relationship with patients. A lot of studies emphasized the factor of physician and present that the hypothesis of induced demand concentrates on physicians' motivations. ,,,,,, Fabbri emphasized that some physicians explicitly perform induced demand. 
A part of the factors related to physicians in induced demand is structural factors. Systematically, there is no appropriate supervision on medical indications. As a result, physicians are free in providing different services. Another factor obtained from the study is physicians' insecurities in the first stages of their professional lives; insecurities such as the length of physicians' education, legal procedures such as military service and passing their projects causes that physicians perform induced demand to compensate and limit these insecurities. Another reason is due to the organization in which they work, if this organization receives a large number of patients beyond its capacity and capability, physicians may unconsciously perform induced demand to get rid of patients.
One of the structural factors is physicians' independency of insurance contracts, in spite of the difference in tariffs, nowadays, patients and physicians less pay attention to the necessity of insurance because insurances do not provide sufficient cover for patients' costs. Hasaart concluded that physicians themselves have motivation for induced demand.  Bickerdyke et al. claims that the lack of contract or employment relationship among third party insurance companies and physicians is effective on induced demand.  Another factor is structural problems of the public sector, which causes that physicians do not have tendency to provide proper services to patients in the public sector because in the public sector physicians' fees are paid with delays and large deductions. Palesh et al. present the deleterious effects of concurrent physicians' employment in the public and private sectors (dichotomous act) as the facilitation of induced demand. 
The second part of the factors related to physicians in induced demand consists of factors related to statuses and behaviors. Due to having authority, physicians can cause that patients to follow them. Sometimes improper competitions between physicians causes that they attract patients for gaining more profits; in fact, to maintain their own statuses in a competitive environment with other physicians, some physicians are to induce fake services to be able to keep patients for themselves. Different studies indicate that physicians' decisions determine when a patient should go to hospitals, what procedures should be performed and what medicines should be prescribed. ,, Evans and Fabbri present that physicians have significant leverage on the degree and pattern of induced medical healthcare. ,
The relationship between physicians and patients has an important role in induced demand which in case of its being inappropriateness, more induced demand will occur, in this relationship, if physicians' reexaminations do not enjoy required comprehensiveness, a large part of patients' problems may remain invisible and at last improper services may be provided for patients. Sometimes, physicians do not allocate enough and standard time for examining patients, which may be due to the high volume of visitors. Accordingly, physicians are not justified regarding the real problem and may suffice to prescribe some medicines and finally, the occurrence of induced demand is highly expected.
Another factor of the reasons due to statuses and behaviors is physicians' customer focus. To attract patients, physicians may employ induced demand. Another factor can be physicians' insufficient knowledge and skills. Sometimes, due to insufficient skills, some side effects may occur for patients who may be forced to pursue a series of unnecessary services for improving these side effects. Izumida et al. and Bickerdyke et al. emphasized the factor of physicians' insufficient knowledge and skills. ,
Regulative and legal affairs are among the factors affecting induced demand. Usually, physicians fear patients' complaints and regulatory authorities' supervision because it is possible that the results of the investigation into a complaint may tarnish physicians' faces. McGuire states that the defensive medicine is considered as one factor of induced demand. One instance of defensive demand is when a procedure has no benefit for patients or even endangers patients' lives, but physicians advise this method for selfish reasons.  Danzon points out that "defensive medicine" occurs when a physician performs a procedure for defending himself against any lawsuit. 
Ethical factors are other parts of physicians' statuses and behaviors factors. Physicians' easygoingness causes that the proper process of therapy is not performed; as a result, physicians, instead of performing a simple examination, rely on advanced technologies. If physicians consider their Hippocratic Oath, they never provide unnecessary services contrary to patients' benefits and the health system. De Jaegher considered the role of factors such as medical ethics and physicians' competition.  Dosoretz states that the relationship between physicians and patients become complicated when physicians and his desirability are influenced by ethical considerations. 
Economic factors are another set of factors affecting physicians' persuasion for induced demand. It can be said that they are the main origins of induced demand. To earn more income, physicians may use induced demand. Improper dependency of physicians and other health services providers are among the factors affecting induced demand. To sell more products, pharmaceutical and equipment companies try to make a relationship with physicians as the first gates of connection with patients in one-way or another. In fact, the incentives and commissions considered for physicians that are called "shared interests," is a factor in occurring induced demand. Physicians start to act in this section as investors and as shareholders to earn more benefits from patients' visits. Dosoretz evaluated financial incentives in physicians' decision-makings as important.  Studies have indicated that physicians can change the demand curve for the benefit of their income to any situation. ,, Labelle et al. and Estano propose that physicians may do measures based on their financial and personal benefits.  Izumida et al. and Bickerdyke et al. considered the common motivation for the supplier induced demand as physicians' self-interest. ,
Abdoli and Varhami concluded that in case that physicians are providers of services such as nutritional advice in their offices or owners of private laboratories, or even are in relationship with pharmacies, their motivation for induced demand will be increasing.  Izumida et al. and Bickerdyke et al. emphasized the physicians' conspiracy factor to sell services for induced demand. In addition, they claimed that if the staff is members of shareholders of hospitals and clinics, they try to sell unnecessary services in one-way or another by creating induced demand. , McGuire states that self-reference is another factor in induced demand.  The study carried out by Mitchell and Scott, Hillman, et al. and Crane showed that the physicians enjoying diagnostic equipment, tend more to prescribe paraclinical tests for their patients. ,,
| Conclusion|| |
The results of the present study provided a comprehensive image of the reasons affecting physicians' behaviors in occurring induced demand. The most obvious findings of the research included structural factors, factors due to statuses and behaviors and economic factors. The findings of the research showed that physicians are considered as the first stimuli of induced demand who manage active patients' demands.
In the domain of structural factors; improper supervision of medical indications, expectations of physicians to activate other medical sections, physicians' insecurities in the first stages of their professional lives, maintaining physicians' faces, reception of a large number of patients beyond its physicians' capacities and capabilities, physicians' independency of insurance contracts, the reluctance of physicians to provide proper service to patients in the public sector affect the occurrence of induced demand. in the domain of factors due to statuses and behaviors, physicians' authority in patients' compliance, competition among physicians, the lack of a comprehensive examination, physicians' customer focus physicians' insufficient knowledge and skills, lack of commitment to ethics may provide the grounds for occurring induced demand; and in the domain of economic factors; physician's tendency to maximizing profits, earning more profits, workflow of medical offices, improper dependency of physicians and other health services providers, physicians' improper relationship with institutes, and incentives and commissions for encouraging physicians for financial partnership with other institutes are considered the main factors of occurring induced demand.
More research on this field can contribute to quantitative investigation of physicians' roles in occurring induced demand separated by healthcare services. It is suggested that to control induced demand, strategies such as medical ethics, observing the process of diagnosing diseases from simple to complicated measures, investigating patients' real needs for referring to specialists, allocating enough time for examining patients, the up datedness of physicians' knowledge and supervising physicians' relationships with other health-related institutes should be employed.
| Acknowledgment|| |
Thanks go to those who contributed in this research.
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