Academic Articles Supply of Medical Services

Do female physicians capture their scarcity value? The case of OB/GYNs

In one 1998 survey, 52% of patients preferred a female gynecologist while only 4% preferred a male gynecologist (44% expressed no preference).  If the healthcare market were competitive, the high demand for female gynecologists would lead to higher fees for female doctors (in the short term) and more female physicians entering the gynecology specialty (in the long run).  However, healthcare markets are not competitive in either the short run or the long run.  Physician contracts, hospital agreements, insurance payments schedules and coinsurance rates distort markets in the short run.  Lengthy educational requirements, discrimination in residency placement, and a fixed number of residency spots in each sub-specialty make the physician market imperfectly competitive in the long run as well.  Even in this imperfect market, an economist is left to wonder whether or not female OB/GYNs are able to capture their scarcity value.

This is the question of a 2006 working paper by Jessica Wolpaw Reyes (“Do female physicians capture their scarcity value? The case of OB/GYNs“).  Reyes uses the Young Physicians Surveys in 1987, 1991 and 1997 to see how excess demand for female OB/GYNs manifests itself in the medical market.  Reyes uses a simple difference-in-difference empirical approach as follows:

  • Y=β_0 + β_1*F + β_2*(OBGYN) + β_3(F) * (OBGYN) + XΓ +…

F‘ is a dummy variable for if the physician is a female and ‘OBGYN‘ is a dummy variable if the doctor is an OB/GYN specialists.  The regression also includes covariates (‘X’) and a vector of dummies for other specialties (not shown above).  The dependent variable ‘Y’ is either the physician’s standard fee or the wait time to see the doctor. 

Reyes finds that overall fees are not higher for female OB/GYNs.  After separating the sample into doctors with a managed care contract (i.e.: if they are employed by an HMO, IPA or PPO) and those outside of managed care, Reyes finds that female OB/GYN physicians working outside of the managed care setting do earn a premium over male physicians in this specialty, while those in managed care do not.  One male physician humorously named this wage premium the “testicle tax.”

Wait times for female OB/GYNs are uniformly longer than for male OB/GYNs.  This is especially true for physicians under managed care contracts.  These conclusions are intuitive since in the managed care setting, medical services are not rationed by price, but instead by ‘queuing’.