How competition play a role in dental pricing? A study on French medico-administrative and tax reports dataset.

ABSTRACT

OBJECTIVES: French dentists charge additional fees for dental prostheses. This paper aims to provide new information on the determinants of dental price setting and inform public decision-making in the context of the widespread rejection of prosthetic dental care for financial reasons. We focus on the competitive mechanism in the dental prosthetics market and measure the impact of the density of professionals and competitors' prices on the fees charged by dentists. METHODS: We use data merging from an administrative health insurance database and information from tax declarations of French dentists. We test the effect of competitor prices and competition on individual price-setting using instrumental variables. The database obtained included 29,220 dentists. RESULTS: Practitioners' prices grow with competitors' prices (+1€ in competitor prices entails an increase of + 0.37€ in the practitioner's price). Women set lower prices, and having a young child in the household predicts an increase in price of 6.8€ (p-value=0.014). Rural areas present lower fees than urban areas (+11.4€ (p value=0.000)). CONCLUSION: Prosthetic prices are strategic complements that are compatible with the application of monopolistic competition in the dental care market. We encourage the regulator to develop competitive mechanisms, for example, through a public offer at moderate prices.