The identification of supplier-inducement in a fixed price system of health care provision. The case of dentistry in the United Kingdom.

The analysis in this paper extends the existing research on supplier-inducement by introducing a fixed price constraint on supplier behaviour and analysing output by treatment episode. Testable predictions are generated which distinguish between the inducement and traditional approaches to explaining supplier behaviour. Using data on dental care provision under the U.K. National Health Service support is found for the presence of supplier-inducement. The implications of the findings for the organisation of dental care in the U.K. are considered.