Primary care is a notable example of a service industry where capacity-constrained suppliers face fluctuating demand levels. To meet this challenge, physicians trade off their time with patients with other inputs such as lab tests and referrals. We study this tradeoff using administrative data from a large Israeli HMO where the absence of colleagues generates exogenous variation in physician workload. We motivate and estimate a range of specifications, from a classic exclusion restriction within a linear model to non-parametric, partially identified models. The results suggest that diagnostic inputs are unlikely to properly compensate for a decline in time spent with patients.
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© 2022 The Authors. The RAND Journal of Economics published by Wiley Periodicals LLC on behalf of The RAND Corporation.