Antibiotic Regulation and Physician Ownership

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As antimicrobial resistance becomes a global threat in public health, this paper shows physician agency is the main driver behind inappropriate antibiotic prescriptions. I used data from Taiwan with more than 10 million patient visits for viral upper respiratory tract infections and found that antibiotics were prescribed in 12\% of the visits. Empirical results show that the inappropriate antibiotic prescriptions were more likely to be given by physician owners and dispensers. The number of doses prescribed is found to increase with the profit margin. The results also reveal that patients did not prefer to receive antibiotics, as their chances of returning to the same doctor would be reduced if they had received inappropriate antibiotics in the previous visit. The results suggest the tradeoff for prescribing inappropriate antibiotics: to earn a high profit margin at the risk of losing patients in the future. Medical providers facing less competition were found to be more likely to prescribe inappropriate antibiotics given patients’ sparse alternatives.