Does competition among general practitioners increase or decrease the consumption of specialist health care?

Studies of the effects of capacity and competition among general practitioners (GPs) on the use of specialist health care services are inconclusive. Some studies indicate that an increase in the number of GPs leads to increased consumption of specialist health care, while other studies point in the opposite direction. This article adds to the literature in two ways; first by testing out different operationalization of capacity and competition among GPs, and then by testing out effects of capacity and competition on use of specialist health care services as this is disaggregated into ambulatory and inpatient activities. The empirical tests indicate that GP capacity in itself does not affect use of specialist health care services. Increased competitions among GPs do, however, reduce the use of ambulatory care while the effects on the use of inpatient services are unaffected.