Primary physicians' response to changes in fees.

The study examines how the service production of primary physicians in Norway is influenced by changes in fees. The data represent about 2,650 fee-for-service physicians for the years 1995--2000. We constructed a variable that made it possible to estimate income effects of fee changes on service levels. Service production was measured by the number of consultations per physician, the number of laboratory tests per consultation and the proportion of consultations lasting more than 20 min. Our main finding is that fee changes have no income effect on service production. Our results imply that fee regulation can be an effective means of controlling physicians' income, and therefore government expenditure, on primary physician services.