FEDERAL

rVER , Chai,. BAILEY

, (

.v ANI , Com:CUENAGA , L.ommlSSlonerSTRENIO , JR., Commissioner

BUREAU OF ECONOMICS

:HEFFMAN , DirectorERMAN, Associate Director for Policy:JENFELD , Associate Director for Special ProjectsBOND Deputy Director for Operations and

Consumer Protection:ANKENA , Deputy Director for Economic Policy

AnalysisHIGGINS, Deputy Director for AntitrustUTLER, Assistant Director for Economic PolicyAnalysis 3ROGAN, Assistant Director for Antitrust

OHNSON, Assistant Director for Antitrust

BUTTERS, Assistant Director for ConsumerProtection

een prepared by two staff members of thenics of the Federal Trade Commission, ewed by, nor does it necessarily reflect themission or any of its members.

;rvc mucn pra15C DUt no Dlamc lor the report'sIt.

iji

lccptual Modcls .

:al Studics .

. . . . . . . .

ctric Modcl.

. . . . . . . . . . . . . . . . . . . . . . .

ts.

. . . . . . . . . . . .

thc Quality of Scrvicc

IDS

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . .

. . . . . . . .

Aoocndix

for A vcragc Pricc Equation

. . . . . . . . . . . . . . .

for Oral Exam Pricc Equation,

. .

.. . . . . . . . o

. . . . .

for Radiograph Pricc Equation,

. . . . . . . . . . . . .

Prophylaxis Pricc Equation,

. . . . . . . . . . . .. .

Fluoridc Pricc Equation,

.. . . . . . . . . . . . .

- - - - -------.---.

Equation

. . . . . . .. . . . . . . .

csults for Amalgam Rcstorationcc) Pricc Equation

. .

o. . . . . .

. . . . . . . . . .

R.csults for Gold Inlay Pricc Equation

. . . . . . . . . . . . . . . . . .

R.csults for Gold Crown Pricc Equation

. . . . . . . . . . . . . . . . . .

csults for Dcntist Nct Incomc1970 . . .

, . . . , . . . . . . .

csults for A vcragc Pricc Equation

. . . . . . . . . . . . . . . . . .

'tcsults for Oral Exam Pricc Equation

. . . . . . . . . . . . . . . . . .

."lts for Radiograph Pricc Equation

. . . . .. . . . . . . . . . . .

Its for Adult Prophylaxis Pricc

. . . . . . . . . . . . . . .

lcsults for Childrcn s Prophylaxis, 1982

....,.......

suits for Fluoridc Pricc Equation

. . . . . . . .. . . . . . . . .

vii

r Amalgam RcstorationIcnt) Pricc EqUation,

r Gold Inlay Pricc

r Gold Crown Pricc

Root Canal Pricc

Extraction Pricc

viii

;;;:i:UU 111""11;4:;1; LUll V1"\"~0I UI4L \,UU;)UUn;IO) IJG.!hc cxtcnt that highcr priccs causc consumcrsir purchascs of dcntal scrviccs, thc rcsult:tion in dcntal hcalth,

cr way, a potcntial bcncfit of relaxing:hc usc of dcntal auxiliarics is thc cxtcnsion

onsumcrs who do not currcntly rcccivc thcmlIing Officc, 1980, chap, 2). A 1977 survey

ational Ccntcr for Health Statistics found). population had not visited a dcntist inrd had not visitcd a dcntist in two years)ximatcly 20 millon Amcricans had ncvcr1\0, 1980, pp, 14- 15). High cost, in tcrmst timc, is a major rcason why manybtain routinc dcntal carc.l To thc extcnt

oUAiliary use rcstrictions would incrcaseaccessibility, and lower the cost of dental

;onsumcrs would obtain such care.

J cost of relaxing rcstrictions on the use ofcs is a rcduction in thc quality of dentalliaricsreccivc Icss cxtensivc training thanld might bc lcss skilled in thc tasks thatlclcgatc to thcm.

rcport we cvaluatc thc cffccts on price and, of a rclaxation of rcstrictions on dentists' use

Our study examincs rcstrictions on thelygicnists that a dcntist may cmploy and

,ther rcasons citcd arc fcar of pain and lack ofhc conscquenccs of untreated dental disease.

tatc-lcvel pricc data are availablc.wcrc prcscnt in both 1982 and

car for which information onblc), our 1982 estimatcs providc aof currcnt pricc cffccts of the. thc cffccts of auxilary useiurvcy an cxtcnsivc. litcraturc thatvicc providcd by dcntists to thatcs,

cvidcncc that, in both 1970 andc of dental aux iliarics raiscd the,ccdurcs and thc avcragc pricc ofto our cstimatcs. thc individualcascs rangcd from six to thirtyninc to tcn pcrcent in 1982. Our,vcragc pricc of a dcntal visit

. scvcn pcrccn t for 1982.

I imposcd substantial losscs oncconomy. Our cstimatcd loss to

)0 for 1970 and is approximately: cstimatc that thc loss to thc U.)0 milion in 1970, and morc thanausc thc numbcr of statcs thatctions in 1982 is comparablc to12 cstimatcs provide a rcasonablciCS duc to thc rcstrictions.

c cxprcsscd in 1986 dollars.

:sults of this and prcvious studics, wetion of rcstrictions on thc numbcr ofist may employ would bcnefit consumersIC quality of scrvicc at a lower price.:rs and thc U.S. cconomy would obtain~d incrcascd purchascs of dental care by

could improve their dental hcalth,S Wethat statcs that rcstrict thc number of

I givc scrious considcration to rclaxing

Bccausc our study docs not cxamine:ndcnt practicc by dcntal auxiliaries, wcIS on thc costs or bcncfits of such

, rclaxation of auxilary use restrictionsity scrvicc at a lowcr pricc, consumcrs

'ricc- quality combination to the curren uality combination in rcstrictcd statcs, .

:ntist.

.ygicnist must complete a two-ycar~ol program of instruction a t a tcchnicalcollege, or univcrsity. Then thc hygienist

, liccnsurc cxamination to practice in thatenist' traditional primary functions arercvcntion of oral discase: for cxamplclylaxcs (cleanings), taking radiographs! fluoridc treatmcnts.

Lssistants rcccivc thcir training on thc job,s of thcm, howcver, havc obtaincd onc oruction at a vocational-tcchnical school or

Although assistants arc not licenscd by aormal education may take an cxamination

: American Dcntal Assistants Association,

e werc approximatcly 110,000 dcntistssts; 140 000 dcntal assistants, and 10 000(Most of the information in this section980 , pp. 2-

, Colorado, and Washington, statc dentalIS arc proposing that hygienists be .ndcpcndcntly of dcntists, For examplehygicnists with five ycars of cxpericncc

cstablish their own offices and to.ygicnc serviccs under co'tract with. a

, "

dental hygicnist practitioncrs" with1itcd school and two ycars of supervised)crmittcd to practice independcntly,

rll

lSS.;,u. Q.lU. .11.1.. ..""U..a.I,.VII \.,/aIlIJUaL.iUU) bccomc an EFDA vary by statc, as do the,

an EFDA is pcrmitted to perform, In someng rcstorations (fillings) is one of the EFDA'tions. To complctca rcstoration, the EFDAaterial (such as amalgam , composite resin, or

I ina cavity drilcd by the dcntist, and shapesrcconstruct thc original outlinc of the tooth.

I.U 11151.""111.;)1.;) GIIU CI;);)J,;)LGIIL;).

rcgulations spccify thc kind

~ust cxcrcisc ovcr auxiliaricstions. Thc rcquircd supcrvision

, dcpcnding upon thc function.thc dcntist to authorizc andrm cc tain proccdurcs, but docs

bc prcscnt. Dircct supcrvision

bc prcscnt whilc thc auxilary.s (Johnson and Holz, 1973). Indentist has ultimatc responsibility

thc maximum numbcr of dcntalay cmploy,6 Furthcr, thc numbcr~ rcstrictions has incrcascd since:Ivc statcs (plus the District ofJmbcr of hygicnists that a dcntistwith thc majority of thcse statcsygicnists pcr dcntist to two, cd thc numbcr of hygicnists, withmbcr to two. By 1985, scvcnteen

)s, many statcs rcstrictcd dentalional" functions of prophylaxis,radiographs, and charting existingI and Bcrnstcin, 1972). As theiia rics incrcascd,. howcvcr, sta tes

thc numbcr of dcntal hygicniststo cmploy bctwccn one and threeates, California, limits thc numbcr

lowcvcr, lall 1I1I.U I.WU ldl "'a.1. l5V1J."' \J.j Q.,l

,ion" which permits thc dentist to delegatc anythin thc compctcncc of thc auxiliary; and (2) a

emitted or prohibited auxiliary functions,

cxpandcd functions that somc states didto dclcgatc to auxiliaries in 1970 are:ry oral cxaminations , taking radiographscatments, and complcting amalgamrst thrcc rcstrictions may havc applicdistants, bccausc many statcs considcredIDS to bc traditional hygicnist functions,

rictions wcrc virtually noncxistcnt forIssistants, Icaving only thc rcstriction onrcstorations.

on complcting amalgam rcstorations was:sprcad rcstrictions on auxiliarics in both

, only fivc states pcrmittcd auxiliaricsdons, By 1982, tcn statcs pcrmittcdm this function. Also in 1982, eightItal assistants to complctc amalgam

lolz (1973, p.2) n()tc that statc laws andsomc instanccs ambiguous rcgarding

cstrictions apply to hygicnists, ssistants

ta for carlicr ycars, thcsc cight stateset of thc tcn that allowed hygienists to

liccnsccs of othcr statcs.ition statcs.

In J 982

---- --- ----- -- - .----...-- .... ........ ....""

output and of thesc inputs as givcn, and toimizc nct incomc.ll To do this, absentIe usc of inputs dcntists combinc inputs sothe cost of producing any chosen lcvcl of

Ise rcstrictions can prcvcnt dentists fromlost cfficient combination of inputs. Foroptimal ratio of hygicnists to dcntists is:n a rcgulation limiting thc actual ratio toforcc dentists to dcviate from thc optimum,,c a highcr cost of producing dcntal serviccscrvicc priccs.

Ilify thc discussion, we ignorc othcr inputi secrctarics, rcccptionists, bookkccpers, andicians. According to 1982 ADA data, dcntists employed no bookkcepcrs, and 94no tcchnicians,

, of such simplifying assumptions is to:mpirically tcstablc hypothcscs rcgardingary usc rcstrictions. Othcr assumptionscxamplc, wc could assumc that dcntistsunction in which both ,nct incomc andlcs--such as location, leisurc, and thcc argumcnts. This would implY that aing to sacrificc somc incomc to practiceion, to havc morc Icisurc timc, or toscrvicc. Scc Conrad and Shcldon (1982)

dcntist-utility-maximization modcl

(1979).

.icc prices and dcntists' incomcs due:tions follow from thrce conceptualrvicc firm, In thc rcmaindcr of thismodels.

wc assumc that dental firms produce-visits. All firms arc assumcd to uselich combincs thc scrviccs of dcntists

Somc of cach of thcsc input scrviceslutput. Wc furthcr assumc that if all)cation cxpand production, additional

rviccs can bc hircd at thcir prcvailing

wc assumc that additional dcntisty at a highcr wagc.

ntists and ncw-cntrant dcntists supplyat a highcr wagc. An cxpansion of

dcntists increascs thc marginal valueausc thc incumbcnts JOust work longeris needcd to induce thcsc dcntists to

Potcntial ncw cntrants consist of

s a paymcnt to an input supplier inincome that would rctain his input

(J 978) dcvclop a modcl in which:ntal scrviccs is influcnccd not onlythc timc rcquircd to obtain thoscdon that follows, wc rcach similarjmc assumption.

latcsl4 andIcn tist scrv i,

IICCS for the

comparcd tlnts with

Id contributc to thc upward slopc of they function in somc states,16 Entry intocts appcars to bc impcdcd in statcs thatnt-of-state dcntists' liccnses (sce Holcn

urizi , and Redcr, 1968). Bccause of theIC statcs' cxamination requircmcnts, ato bc nccdcd to inducc cntry by

sumptions, an incrcasc in consumCrisits Icads to a substitution of dcntalcrviccs for thc input scrvices supplied

Imcrs ' cducation and incomc risc, thevices incrcascs, causing an incrcasc in:s thc wagc of dcntists relativc to thc

Dcpartmcnt of Hcalth and Human.cd on ADA data, thcrc wcrc 5 337s in 1984 compared to 137 950 activc

(1977) and Fraundorf (1984) forby thc ADA its prcdecessor: dental socictics to rcstrict entry into

non-rccognition in somc statcs willcs in othcr statcs. For cxamplc, ifnc is rclativcly low in state, A thcs of othcr states wil impcdc thc cxits a rcsult, dcntists' avcragc incomc in:Iy low. To simplify thc discussion , wc

,due) d

19 cost rcduction, thc

upward-sloping markc:d in Figurc 1. At wagc is rclatively 1 .: covcrs firms' costs including a

t higher Icvcls of production, the

aiscs costs, and a highcr output~sts including a normal rcturn.1

I for patient-visits is shown inOthcr things cqual, wc cxpcct

uicnt-visits whcn thc pricc falls,d has a ncgativc slopc (sce Hu

Sand markct dcmand D, theicnt-visit is P, and the number ofQ, Bccausc of thc upward-slopinglcntists carn rcnts cqual to area

auxiliary usc rcstrictions arecr-dentists from minimizing costsscrviccs for dentist scrviccs as

As a rcsult thc cost ofcvcry Icvel of output. Morcover

.ppclbaum (1982) suggcst anothcriupply of paticnt-visits could bcI dcntists' abilty and productivity.

cr in skil in pcrforming dcntalto managc thc activitics of dcntaliffcrcnccs, somc dcntal firms willthcrs, and the markct supply ofard.

Visits

falls to Q' The cost of theto consumcrs is cqual to arca P'

lS.19 Dcntists now carn rcnts cqual tondcr certain conditions (see Salop,HtZ, 1984), will bc largcr than arcaby dentists in unrestrictcd markets.

ers a loss equal to arca BE'EA. Thisarcas: BE' , thc additional rcsources

patient-visits; and E' , thc dentist

"rplus lost duc to thc rcduction inIQ'

nceptual model, wc rctain all but two

jf our first modcl. Wc rclax theoutput and thc assumption that somc

dcd to producc output. Instcad, wental, scrvicc firm produccs multiple

, wc wil cxaminc thc possiblc cffects:tions on the quality of dcntal scrvices.

rplus is thc amount that a consumcrpay for a commodity in cxccss of thc10 doing without thc commodity.

licts thc rcnts carncd by dcntists as alut auxiliary usc rcstrictions. Bccausc

changc thc numbcr of dcntists, wc:0 show thc cffcct on rcnt pcr dcntist.:rtain conditions, rcnt pcr dcntist wilry usc rcstrictions.

Iral C)

s), anciomc I

canthc ot

Put-SUIys byics. !slop i) -

sloping. By contrast, assuming that thcarics is horizontal (morc auxiliarics can bc: prcvailing wagc), thc supply of x-rays by) horizontal.

:t for x-rays undcr thcsc assumptions isHC 2. Thc horizontal supply of x-rays by; the upward-sloping supply of x-rays byrhc markct dcmand for x-rays is D. Abscntarictions, auxiliarics supply all x-rays in thcrium is at E with quantity Q sold at pricc P.Irizontal, no cconomic rcnts arc carncd. Byulation prcvcnts auxiliarics from supplyingtists providc a smallcr quantity of x-rays, Q':c, P'. At thc ncw cquilibrium , E' , on thcof x-rays, Sd' dcntists carn rcnts cqual to

nsumcr surplus falls by an amount cqual tolC U.S, cconomy suffcrs a loss equal to arcaloss is a sum of two arcas: AE' , thcrccs nccdcd to producc Q' x-rays; and E'r surplus duc to thc rcduction in thc numbcrI to Q'

nodcl rcstorcs our first modcl's assumption of, paticnt-visits, but rclaxcs thc assumptionscrvicc firms usc thc samc tcchnology.

I that must bc produccd with a combinationauxiliary inputs can bc analyzcd using our

Figure 2

Supply and Demand for X-Rays

price

the supply I.un\,uul. UI 4,,11 !SlUU", VI. l1.U1.;; JOI

g, thc typc- supply function is stccpcr., firms usc dcntist inputs morc intcnsivcly,rapidly whcn production cxpansion drivcs upwagc. As a rcsult, a highcr pricc ofis nccdcd at cvcry output to covcr costsmal rcturn.

dcpicts a markct in which typc-a and typc-Panel 3. 1 shows thc supply of paticnt-visits

I firms can bc classificd as solo practiccs, ors, According to 1982 ADA data, almost 75rivatcly practicing dcntists workcd as soloGroup practiccs with two dcntists accountedof privatcly r'fcticing dcntists, and practiccs

morc " . s accountcd for thc rcmaining nincvatcly icing dcntists.iccs tcn!! to rcscmblc our typc-b firms. Forlta indicatc that S4 pcrccnt of solo dcntistsIcntal hygicnists, and 35 pcrccnt cmploycd onc

samc ycar, SS pcrccnt of solo dcntistsI assistant, and 23 pcrccnt cmploycd two

; data on auxilary use by group practiccs,cpcndcnt dcntists (which includc groupt that groups cmploy morc auxilarics pcr

dcntists. In addition, grcatct uscofps is asscrtcd by Conrad and Shcldon" in Kushman ct al.'s (1978) argumcnt

nits morc cfficicnt usc of auxilarics.arc morc likcly to rcscmblc our typc-Lcticcs.

,1-

--..-

ii'

.c'ii'

ii'

ne that auxiliary usc rcstrictions arc imposcdaffcct only typc-a firms.23 Thc incrcascdfirms arc rcprcscntcd by a shift and rotation

upply curvc to S' . This causcs thc markctto S', At thc ncw cquilbrium, E', thcrc is aand a lowcr quantity sold, Q'. Thc quantity

ms falls to Q' . By contrast, thc quantityrms riscs to Q\, and thc rcnts carncd byiO P' A. As indicatcd in thc discussion ofIIc rcnt$ carncd by typc-a firms risc undcr

Consumcr surplus is rcduccd by C' EC.suffcrs a loss cqual to arca FE'E. This

twO arcas: FE' , thc additional rcsourccs

c Q' paticnt-visits; and E'EG, thc dcntistr surplus lost duc to thc rcduction in thc.visits from Q to Q'

:tion, wc ha vc prcscntcd thrcc simplcIs which prcdict that auxiliary uscincrcasc dcntal scrvicc priccs and cans carncd by at Icast somc dcntal scrvicc:vicwing thc litcraturc on auxiHary uscc ncxt scction, wc wil dcvclop a simplcI to cstimatc thc Pricc and incomc cffcctsns. Using our cconomctric rcsults, wc wils that thc rcstrictions imposc on consumcrsanomy,

,ulls would follow from thc c wcakcruxiliary usc rcstrictions havc a largcr cffcctthan on typc-b firms. Howcvcr, thc

bc morc complicatcd. Bccausc typc-a firmsry-intcnsivc, rcstrictions do havc a ' IargcrIn on typc-b firms.

rical Studies

;i:s havc cstim:DcVany

f dcntists rclal

n ts rcspcnumbcrinal proc

lestrictiO-- --- _n- - __nn_

d to pcrform rcducc thc marginalativc to that of dcntal assistants.Lsistcnt with thc hypOthcsis thatL causc dcntal firms to dcviatc fromLS, using morc dcntist inputs rclativc: authors concludcd that, as a result

; raisc dcntal scrvicc costs, and mayfor thosc scrviccs.

papcr summarizcs a morc cxtensivc11. (1978), which found that dental

rcstrictivc statcs using morc dcntist, and less capital than in pcrmissiveincd as pcrmissivc thosc statcs thatamalgam rcstorations to bc dclcga tcdg ct ill. argucd that this cxpandcdc sct of functions that arc Icgallydata, thc authors showcd that in

pcrccnt of dcntal assistant functions:ntal hygicnist functions wcrc lcgallywith somc exceptions, thc rcstrictivee than 17 pcrccnt of thc functions to

~und that hiring morc" auxilarics and,ctions to thcm incrcascs thc potcntialirms (for cxamplc, scc McBridc, 1975Tlcr, 1975). For a discussion of thcse:1978).

11 II hJ

typcrcist

- - - - - ---- - ---- -- --- g--

1m rcstorations would bc lowcr. Thc:sults, howcvcr, do not support thcsc

authors suggcstcd thrce possiblo:csc ncgativc rcsults: I) it was notEFDAs in pcrmissivc statcs, 2) auxiliarywcrc not cnforccd in rcstrictivc statcsI of EFDAs was profitablc in pcrmissivcwas rcquircd.

tcldon (1982) cxamincd auxilary uscg a modcl similar to onc dcvclopcd bytC authors' rcduccd. form pricc cquationrcstrictions on: rccognition of dcntiststcs, advcrtising, auxilary functions, thc

pcr' dcntist, and thc numbcr of hygicnistsan avcragc pricc of a dcntal visit and

:crvicc prices wcrc uscd. For a samplc offound that rcstrictions on thc rccognitionltists had a significant positivc cffcct onand on thc pricc of 'singlc cxtractions.

)clawarc, and Montana arc thc cxccptions.I as rcstricti vc sta tcs bcca usc thcy do not

dclcgatc thc finishing of amalgam10 pcrmit dclcgation of up to 52 pcrccnttions to dcntal assistants and up to lctions to dcntal hygicnists.

sscssed thc impact of liccnsing practiccsdcntal visit and on thc nct incomc of

rhc author found that, othcr things cqualn! highcr in statcs that impcdcd cntry bys, Dcntists' net incomc was 12 pcrccnt: statcs.

in,

:ffrcs: a onc-surfacc restorations. As futured Shcldon suggcstcd thc usc of variablesctions on individual functions, instcad ofc tha t thc au thors uscd.

,us studics havc prcscntcd somc cvidcncecstrictions I) distort thc combination oflction of dcntal scrviccs, 2) raisc costshcr scrvicc priccs. Thc studics containwcvcr, that such rcstrictions havc noI dcntal scrvicc production. Thcsc mixcdIe nccd for morc cxamination of thc

that follow, wc wil cxtcnd past work to

cconomctric modcl of auxilary usc11 thcn usc both 1970 and 1982 data tond incomc cffccts of thc rcstrictions, andto consumcrs and to thc U.S. cconomy.

cxpandcd-functions variablcs which takcwhcrc a statc prc cnts dcntal auxiliaricsassistants, from performing thc fOllowingY oral cxaminations, radiographs, fluoridcIgam rcstorations. Thcsc functions wcreh can bc associatcd with a particularIn 1970 thcrc werc somc rcstrictivc

nissivc states for cach of thcse cxpandcdIII four rcstrictions are includcd in thcI 1982 thc first thrcc rcstrictions wcrcIt for both hygicnists and assistants.ction on complcting amalgam rcstorations1982 cquations.

model to tcst thc hypothcscs thatumbcr of hygicnists and on thc functionsdcntal scrvicc priccs and dcntists' nctto somc control variablcs that influcncc

nand for dcntal scrviccs, wc includc a~ account thc cffcct of dcntist liccnsurc;ng a lincar form, thc two cquations ofittcn as follows:

NUM + a2 LIMFUN + as RECOGL + as FLUORID + au INCP + aT AGE,+ u

NUM + b2 LIMFUN + b RECOGL + b FLUORID + bu INCP + b AGEr + c

ineecfla

Ics,

II sc

nct ...--...- -. --.....-. u.

cis of dollars pcr ycar

Ibles arc dcfincd as follows:

in statcs that rcstrict thc

hygicnists pcr dcntistJthcrw isc

numbcr

cctor of rcstrictions, as dcfincd intal practicc acts or rcgulations, on

dclcgation of funCtions toilarics, with thc following clcmcnts:

= I in statcs that do not pcrmit

auxilarics to pcrform oral cxams= 0 othcrwisc

. I in statcs that do not pcrmitauxilarics to takc radiographs

= 0 otherwisc

R = I in statcs that do not pcrmitauxilarics to givc fluoridctrcatmcnts

= 0 othcrwisc

:hc dcfla tors

data. Thcilcd dcfinitions.

IC numbcr of

f dcntal schools to

lsands

ltion drinking

:omc in thousands of

on to total

living in urbanizedtion

:fficicnts and bricf, ollows:

that thcsc rcstrictionsdcntal scrviccs and

ray rcadily availablc

'ulation under 21 orr of this ratio, Scc

"ban population, sccof PODulation. 1980

"'","'''L LUQL Q .Lile-il.",. iI UoLilV V& iI.iI "Uo"'"

c population will faciltatc cntry into;, tending to lowcr priccs and dcntists

ous studics (scc, for cxamplc, Hu, 1981)'idation rcduccs thc dcmand for dcntalnd to rcducc dcntal scrvicc priccs and

to thc pricc cffccts of auxilary usewhat appcars to bc thc mostgcncral

at such a rcstriction wil incrcasc thcscrviccs, but that thc cffcct wil bcof thc scrvicc that is dircctly limitcd.

IOthcsizc that a rcstriction prevcntingpleting amalgam restorations will alsoof oral cxaminations, radiographstrcatmcnts, and cxtractions, but that

vc thc strongcst cffcct on thc pricc of

78) adoptcd a similar hypothesis. Thcusing an auxiliary in placc of a dcntistcicnt Icgislation oallowing thcfunctl_u .\il lowcr thc pricc of tha

:an thcn rcallocatc his timc to othcrausc his labor wil bc sprcad acrossthc cffcct on thc priccs of thcsc

dcmand ror dcntal scrviccs for adults,rc a rclativcly largc fraction of thcpcct dcntal scrvicc priccs and dcntists

er.

cxpcct input priccs (for cxamplc, land) tonizcd arcas, This wil tcnd to incrcasc thcand thc pricc of dcntal scrviccs , and will

comcs, othcr things cqual.

fees by thc rrcqucncy with which cacld; the weights arc providcd by PoetsclWe examinc somc of the scrvices tha

I his study, but wc put greatcr cmphasitensive scrvices.

price data are availablc at thc state12 data on cxpcnditures and numberrvicc are availablc at the zip codeIsurance Association of Amcricathcare Chanes, For cach dcntalthese data to thc statc Icvcl and:s by the total numbcr of chargcs to

ncluded in Shcpard's avcragc are:omplete scrics of x-rays, dcntalI removal , root canal cxtirpation and(onc surface), amalgam fillng (two0 surfaces), cast gold crown, bridgelenturc , and dcnturc repair.

es that wc examinc for 1970 arem(cxcluding radiograph), complcteographs, dcntal prophylaxis, topicalfluoride (onc trcatmcnt cxcluding

oval of tooth (with local ancsthesiastopcrativc carc), cxtirpation of pulpanal (excluding rcstoration), amalgamvity, amalgam filing for two.surfaceo-surfacc cavity, and cast gold crown

avcragc pricc is dcflatcd by 1980 Burcaus budgct data for an intcrmcdiatc incomc,,. A similar dcflator was uscd by Conrad2). By contrast, Shcpard's 1970 avcragcby thc 1970 BLS ConSumcr Pricc Indcx.

In concludcd that this and othcr diffcrcnccs:a and Shcpard's did Dot lcad to a largccstimatcd cffcct of rcciprocal liccnsing of

:s.

iccs that wc includc in our 1982 avcragc11 cxamination bitcwings (two films),;), prophylaxis (childrcn), topical applicationidc (onc including prophylaxis), amalgamduous), amalgam (two surfaccs, dcciduous),facc, pcrmancnt), amalgam (two surfaccs,(gold, two surfaces), gold full cast crowny (one cxcluding rcstoration, traditional),

glc tooth),

Shcpard' s twclvc proccdurcs--bridgc andincludcd in our 1982 averagc bccausc HIAAturcs and numbcr of chargcs wcrc not;tatcs, and bccauscthcsc proccdurcs appcarntitics of auxiliary inputs. In additiQn

data disaggrcgatc prophylaxcs into adult'viccs, and amalgam filings into thosc formancnt tccth, wc includcd thc disaggrcgatcdJr 1982 a vcragc price.

IDC t\U1\ .3urVCV Ol rracncc 1\Cl rrUvisIOn5unctions. 1972 For 1982, limits on the

:nists and rcstrictions on hygicnist functionshe American Dental Hygicnists ' Associationon Packaee. ComDarativc Ovcrview of 51Restrictions on thc rccognition of out-of-licenses arc prcscntcd in Johnson and

and in "Licensurc by Crcdcntials: (1985),

for the rcmaining variablcs wcrcsourccs. Net incomc of dcntists byrtcd in the ADA' 1971 Survcv oflumbcr of dcntal schools is availableRCDort on Dcntal Education. various

Icomc pcr capita, popula tion, and agcfrom thc Statistical Abstract 31 ThcIlation drinking fluoridated watcr istion Census. 1970 and 1980.

changc in the way rcadily availablc dataiffcrcncc cxists bctwccn thc 1970 and 1982cAGE variablc. In 1970, AGE is thcpopulation under 21; in 1982, it is thc

IPUe other I&U.. ' d.ntilu' liC8.

trict tbe numbe ot hyp..ilb pe dentilt.

; do Dot pet auliar. to perlonn pnliinar

t do not pet auxiar. to take and expo

fa not: pennt: auar.. to apply nuorid..

A.. "'?t pet auiar- to complete amalga

Le, .tai' dentiau' 1iC8

number o( hy.peniati p8 dentat.

t pet auiar to complete amalga

..,

takl raiopoph8 aDd applying182,

o Estimation Results

Pricc of a dental visit

vcragc 1970 pricc of a dcntal visit is highcr inrcstrict thc numbcr of hygicnists pcr dcntist, orot pcrmit auxiliarics to complctc amalgam

In statcs that rcstrict thc numbcr of hygicniststhc avcragc price is fivc pcrccnt highcr than theavcragc pricc. In statcs that do not pcrmit

to complctc amalgam rcstorations, thc averagcpcrccnt highcr than thc mcan.

gcncral, in both thc tcxt and tablcs, wc rcportt arc statistically significant at a convcntional

pcrccnt Icvcl.

that rccognizc dcntal liccnscs from othcrcragc priccs that arc four pcrccnt lowcr than:. This rcsult is consistcnt with our prcdictionnition impcdcs cntry, and with thc findings of

:s (scc Shcpard, 1978, and Conrad and Shcldon,

I of scvcral othcr significant cocfficicnts arc1 prcdictions, Thcpositivc cocfficicnt of thc'ariablc is consistcnt with thc hypothesis thatlavc higher factor priccs. Thc positivc percocfficicnt supports thc proposition that highscs the dcmand for dcntal scrviccs. Thcridation cocfficicnt is consistcnt with thc

(continucd...

D". D", D",

D". D", n...

D". D", D".

D". D", D", D",

D". D", D". D",

D". D".

II.

...

D".

D.8 D". 0..

D". D".

D... D". D",

D". D". D...

D". D.8

,Ienl.

UdL II YIS n;II I;) L;) .111 . lSuUU ;)uu::u..uu;.c pcrformancc of thcsc functions.

IUC

ory usc restrictions could bc corrclated with~ns on dcntal practicc, such as rcstrictions on

dcntists and on thc numbcr of officcs that aIpcratc. If such corrclation cxistcd, thcn Ourcstrictions rcsults would bc biascd. ' To tcstty, wc cstimatcd a modcl that includcsadvcrtising and on thc numbcr of officcs pcrcocfficicnts of thcsc addcd rcstrictions arcIn addition, thc cocfficicnts of thc auxiliarys arc csscntially unchangcd. Bascd on thcscconcludc that our auxiliary-usc-rcstrictions'

Dt biascd by thc omission of othcr dcntal-:tions.

lucd)t fluoridation dccrcascs thc dcmand for dcntalfluoridation rcsult is also consistcnt with the

vcral carlicr studics (scc for cxamplc, Shcpard,1981). Finally thc significant coefficicnts of

d variablcs (pcr capita incomc and fluoridation)rt for our hypothcsis that thc supply of dcntal

'ard sloping.

OOL and AGE variablcs' cocfficicntsarc not, similar rcsult was obtained using thc ratio ofaduatcs to population in placc of the ratio ofto population.

imation ofdcfinitivc

this cxpandcd modcl should not bctcst of hypothcscs rcgarding thc

(continucd...

II service Drices

cquations wcrc also cstimatl'hosc priccs wcrc affcctcd ISevcral cocfficicnts havc 1

IIbcr of hygicnists pcr dcnti

IC tcn proccdurcs studicd.hylaxis, fluoride trcatmcnt, cxtractionand onc- and two-surfacc amalgam

cc incrcascs for thcsc scvcn proccd urcsvcn pcrccnt.

four of thc tcn procedurcs arcn statcs that do not allow auxilarics tostorations. Thcsc four proccdurcs arc:h, cxtraction, and root canal thcrapy,for thesc four proccdurcs rangc from",clint. Thcsc rcsults arc inconsistcnt

hat thc rcstriction on complctingil raisc thc pricc of a rcstora tionIthcr dcntal scrviccs.

our avcragc pricc rcsults, thcrcstrictions do not havc significants suggcstcd abovc, thcsc rcstrictions, of dcntal assistants. Hcncc, ours tcnd to providc add cd support for

cithcr advcrtising by ' dcntists or thc:r dcntist. Thc data for t/1cscd primarily bccause of theirrcadyand Shcldon (1982). Thc data do'as littlc intcrstatc ovariation inin 1970 (Conrad and Shcldon, 1982itivc tcst of hypothcscs rcgarding-of -officc rcstrictions would rcquircIf da ta, and is bcyond thc scopc of

ood substitutcs

llts providc cvidc:riccs of somc dCl

dcntal visit. Typothcsis tha thc11 combinations that

sts of dcntal scrvicc firms.

ct Income of Dentists

stimatcd thc cffcct of auxilary usc rcstrictionsow tcst thc hypothcsis that thcy incrcasc thc

dcntistS, a possibilty suggcstcd by Salop,,d Schwartz (1984). For 1970, wc find thatincomc is highcr in statcs that rcstrict thcygicnists pcr dcntist or that do not allow, completc amalgam rcstorations. Whcrcnbers arc limitcd, thc nct incomc of dcntists isighcr than thc mcan nct incomc of dcntists.rics arc not pcrmittcd to completc amalgamcntists' incomc is tcn perccnt higher than. thc

intcrcst to notc' that thc incomc-raisingration rcstriction has pcrsistcd ovcr timc. 5 statcs for which wc have completc data,rc not pcrmittcd to finish amalgam rcstorations38 of 47 such statcs did nOt allow dcntists tofunction in 1982. By contrast, thc othcr

ition of out-of .statc dentists' liccnsc lowcrswo of thc tcn proccdurcs. Thcsc dccrcascs'C to six pcrccnt. With thc cxccption of thcblc (whosc coefficicnt is ncvcr significant), thc

thc othcr cxplanatory variablcs arc significantpricc cquations.

cd in the 1982 cquations. As wcthis rcstriction is corrclated with a

ictions on thc functions that could be:s, which wcrc omittcd from our 1970no and 1982, it appcars that thc states: omitted rcstrictions. As a rcsult, the

rcstriction probably rcprcscntsh rcstrictions in thc 1982 cquations.

dental visit

,ur findings for 1970, thc rcstriction on

cnists pcr dcntist has a significant1982 avcragc pricc of a dcntal visit.

:omparing thc 1970 samplc of statcs for:te data to thc 1982 samplc , thc numberd thc taking of x-rays dcclincd fromonly thc District of Columbia imposcdIy on dcntal assistants.,f dcntists is influcnccd significantly by

rccognition of out-of -state liccnscesc. Dcntists in rccognition statcs havcscvcn pcrccnt bclow thc mcan. Thisith thc hypothesis that non-recognition

,of-statc dcntists. In addi'ion, dcntists1 statcs with high pcr capita incomcs.th thc prcdictcd effcct of pcr capital~d for dcntal scrviccs. Thc rcmainingns and thc SCHOOL, AGE, and URBANicant cocfficicnts.

n..,

n., n..,

n..,

n..,

n...

n..,

n..,

..01.

pcrcethc

IgaRIC cf

,idu:

lat::s 0- -

- - - -- ---------- ..--------- ---

tatcs that do not imposc thcsc rcstrictions.;cdurcs arc: adult prophylaxis, amalgamsurfacc, dcciduous), amalgam rcstorationsacc, pcrmancnt), and two-surface gold inlay.cs rangc from ninc to tcn pcrccnt, cvaluatcdfor cach proccdurc.

IIcs, limits on thc numbcr of hygicnistsnforccd by othcr rcstrictions that prcvcnt

from pcrforming traditional hygicnist:xamplc, in 1982, 32 statcs did not pcrmitto clcan and polish tccth. In statcs thatnumbcr of hygicnists, dcntists could not

lIS for hygicnists to providc prophylaxes.

auxiliarics from complcting amalgamno significant cffect on any of thc 1982

y,

rccognition of out-of-statc dcntistshave a significant price-rcducing cffcct in

incomc pcr capita and thc pcrccntagc of thc:ing fluoridatcd watcr do havc significant.. Thc cocfficicnts of thcsc two dcmandthc samc signs as in the 1970 cquations::r capita incomc and ncgativc for thc: population drinking fluoridatcd watcr. ThcLOd URBAN variablcs do not havc significantc pricc,

1982 individual-pricc equations, rccognition:lentists ' liccnscs lowcrs the pricc only of

individual priccs that wcrc cxamincd. Thcsc rcsults contrastwith thc four significant amalgam-rcstoration cocfficicnts for

1970, Perhaps thc simplcst cxplanation for this contrast, a$suggcstcd by Saving ct al. (1978), is that thc amalgamrcstoration rcstriction is a proxy for a largc sct of auxiliaryfunction rcstrictions, and that most of thc othcr mcmbcrs ofthat sct wcrc climinatcd in thc intcrim.

Altcrnativcly, thc finding that .thc rcstriction onamalgam rcstorations docs not r isc priccs in 1982 may bcthc rcsult of diffcrcnccs in thc pricc data. ADA survcy datawcre used for 1970, but HIAA insurancc data wcrc uscd for1982. An unccrtainty ' associated with thc usc of insuranccdata is whethcr a paticnt with insurancc tcnds to pay highcrpriccs than onc with no insurancc. In , addition, to thccxtent that thcrc is hctcrogcncity within a proccdurccatcgory, and insurancc covcragc is sclcctivc, a pricc basedon insurancc data wil diffcr from a pricc bascd on data thatmorc broadly rcprcsent thc rangc of scrviccs within thcprocedure catcgory. As a rcsult, any bias prcscnt in thc1982 insurance data may bc grcatcr than any bias in thc ADAdata.

Despitc the diffcrcnt data scts uscd, howc\ter, ourempirical rcsults for 1970 and 1982 providc cvidcnce thatauxiliary usc rcstrictions raisc thc priccs of scvcral dentalprocedures and the avcragc pricc of a dcntal visit, Suchprice incrcascs could imposc substantial losscs on consumcrsand on the U.S, cconomy, In thc rcmaindcr of this sectionwc estimate thcsc losscs.

C. Loss Estimatcs

Using our rcgrcssion rcsults, wc can cstimatc thc, Josscsthat auxiliary usc rcstrictions imposcd on consumcrs and onthe U,S. cconomy in 1970 and 1982. Thc losscs arc dcpictcd

in Figurc 4, which is similar to Figurc 1. Both figurcs arcdrawn based on thc assumptions of our first modcl.

1. Consumcr surDlus loss

Auxiliary usc restrictions rcducc consumcr surplus by anamount cqual to arca P' EP in Figurc 4, To cstimatc thisloss, wc dcrivcd an algebraic cxprcssion for arca P' EP intcrms of the perccntagc changc in the pricc of apatient-visit due to thc rcstrictions, total cxpcnditurc onpaticnt-visits, and thc pricc clasticity of dcmand forpatient-visits.46 Values of these variablcs wcrc obtaincdusing our cstimatcd rcgrcssion cocfficicnts, cstimatcs that wemade of expenditurcs 47 and cstimatcs of dcmand clasticity

46 This modcl assumcs that dental firms producc asinglc output, paticnt-visits. Thc modcl is discusscd inSection IV; thc rcsults of estimating thc modcl arc prcsentedin Tables A- I and A- I3,

46 Assuming a non-unitary constant-clasticity demandfunction to simplify ,the mathcmatics, it can bc shown usingthc intcgral calculus that the loss in consumcr surplus isequal to thc following cxpression.

(E/(l-e)) p)(l-e)

whcrc E=total expcnditurc c=clasticity of

p=pcrccntagc dccrcase in price duc to thcauxiliary usc rcstrictions.

dcmand, andrclaxation of

47 For 1970, wc cstimatcd cxpcnditurc pcr dcntist bystatc from ADA data on mcan gross incomc ofindcpcndentdcntists. Lacking data on thc numbcr of indepcndcntdentists by statc, wc uscd an aggrcgatc U.S. ratio ofindcpcndcnt to activc civilan dcntists to convcrt thc" numbcrof activc civilian dcntists in cach statc (obtained from HHSdata) to an estimatc of thc numbcr of indcpcndcnt dcntists inthc state. Wc thcn multiplicd our numbcr-of -dcntistscstimatc by mean gross incomc to obtain cstimatcd dcntal

(continucd...

Figure 4

Supply and Demand for Patient-Visits

price

+-----

patient-visits

that wc obtaincd from thcvalucs of thc clasticity, wccstima tcs. 49

litcraturc.48 Using diffcrcntconstructcd a rangc of loss

For thc ycar 1970, wc cstimatc that rcstrictions on thenumber of hygicnists pcr dcntist rcduccd consumcr surplus by$280-290 millon in thc 12 statcs that imposcd suchrestrictions, Wc also cstimatc that rcstrictions on finishingamalgam restorations rcduccd consumcr surplus by $790-840millon in the 40 statcs that imposcd such rcstrictions. Intotal, wc cstimatc that auxiliary usc rcstrictions imposcd aloss of $1.07-1.3 billion on consumcrs during thc ycar1970, so

For thc ycar 1982, wc cstimatc that rcstrictions on thcnumbcr of hygicnists pcr dcntist rcduccd consumcr surplus by$680-710 million in thc 16 statcs that imposcd suchrcstrictions. Bccausc wc observcd no significant cffcct ofrestrictions on thc finishing of amalgam rcstorations for1982, $680-710 milion is also our cstimatc of the total lossimposed on consumcrs by auxiliary usc rcstrictions in thatycar.

(,..

continucd)expcnditurcs by statc, For 1982, Hcalth CarcAdministration data on dcntal cxpcnditures byprcsented in Lcvit (1985 , pp, 44-45),

Financingstatc are

48 Thc rangc of dcmand clasticity cstimatcs obtained inprcvious studics (0.03 to 1.76) was found in Hu (1981).

49 Bccausc wc cstimatcd thc pcrccntage changc in thcpricc of a paticnt-visit using thc rcstrictcd pricc as thc basc

(P' in Figurc 4), our loss cstimatcs vary positivcly with thcclasticity of dcmand.

so Our loss cstimatcs arc cxprcsscd in 1986 dollars forpurposcs of comparison. Estimatcs of thc total loss maydiffer from thc sum of thc individual loss cstimates due torounding crrors.

s to thc US cconomv

;trictions cost thc U.s.a BE'EA in Figurc 4.ts of thc rcstrictions 0', wc cannot obtain a dihowcvcr, cstimatc thc I,to thc consumcr surpl

nd cstimatc of thc loss, thc loss in consumcr st.. p.--'auxilary use rcstrictions imposcd a

I on thc U.S. cconomy. For 1982, our;340-360 million.

Ie U.S. cconomy wil bc smallcr thanf the rcstrictions transfcr incomc from

it can bc sccn that arca BE'EF is0 thc U.S. cconomy, arca BE'EA. To:0 thc loss in consumcr surplus, arcaict thc arca common to both, E'EF.lOgic P' FP and trianglc BE'F. ry gcomctry tha t thc arca of BE F is, of I"E'FP. Hcncc, onc-half thcis a conscrvativc IOwcr-bound cstimatcconomy. ili

i the (

ring Itrictioust ex

in add

nc,,ork, wc can cstimatc only thc pricc)0 thc cxisting litcraturc to detcrmine thcf a rclaxation of thc rcstrictions on thc:rvicc.

d Appclbaum (1982) prcscnt a model of a)roduccs its output of services subject toation, such as rcstrictions on thc functionsto auxiliarics. Thc quality of scrvice quality of thc inputs, and by thc amountdentist dcvotcs to cach paticnt, As ality docs not nccessarily incrcase whcnan incrcasc in input quality, Rathcr

Id incrcasc, remain constant, or dccrease,thc. dcntist adjusts thc timc spcnt with thctothc mandated incrcasc in input quality,on scrvicc quality of the dclcgation ofries is a- empirical qucstion.

is addrcsscd in an cxtensivc litcraturc(pcrimcnts in , public hcalth, university,ate dcntal practiccs. Thcsc studies arcin finding that quality is not dccreascdIOctions arc dclcgatcd to auxiliarics whoj in thosc functions (see Kaplan, 1980;:ral Accounting Officc , 1980; Hammons andSisty and Hcndcrson, 1974).

tudicscomparc thc tcchnical quality of arformcd by a traincd EFDA to thc qualitya dcntal studcnt or dcntist. For C'xamplc,

IS placing rubbcr dams, taking prcliminaryplacing and finishing rcstorations wcreas no statistically significant diffcrcnce introcedures pcrformcd by an auxiliary andby a dcntal studcnt (Kaplan 1980;

,"U vI .... &;'"01 "''-.'" '"'"U.81 IU '"U.81&LI control groups of practicing dcntists or

dgc, only onc study (Bcrgncr ct aI., 1983)icant diffcrcncc in quality bctwccn thcgicnists and that of dcntists. Using atc dcntal officcs in Washington statc, thc

dcntists had a lowcr frcqucncy ofpositc rcstorations than hygicnists had.uions and bitcwing radiographs, howcverffcrcnccs bctwccn dcntists and hygicnists

;ivc study of cxpandcd functions wasForsyth Dcntal Ccnter in Boston. Thistal hygicnists ' pcrformancc of rcstorativc

(Lobcnc, 1974; Hankin 1977).icnists wcrc allowcd to pcrform thc entirc, including administcring ancsthcsia to

thc cavitics, and placing and carving thcc argucs that propcrly cducatcd dcntal

,---

rcstorations at a rcquircd quality

pcrvision of thc EFDA by a dcntist,in thcse studics. Howcvcr, othcraI., 1985 and Amcrican Dcntal1982) focus on thc dcgrcc of

currcntly cxcrcisc ovcr dental:s prcscnt cvidcncc that hygicnists1tial amount of indcpcndcncc in thc:s and in dcciding whcthcr' a paticnt:lcntist for furthcr trcatmcnt.

rcscnt cmplrIcal rcsults nom twO StUQICStchcwan and Ontario, which comparc thcscrviccs providcd by auxiliarics to thatts. Thc quality of amalgam rcstorationscrowns did not diffcr bctwccn thc two

litcraturc on quality supports thcItal auxilarics can pcrform traditional andctions at thc samc Icvcl of quality as thcidcncc suggcsts that thc rclaxation ofliary usc would n9t rcducc thc quality of

lition of dcntists liccnscd out-of -statcquality of dcntists within a statc. Holcnpapcr prcscnts cvidcncc that statcs withiccnsing standards, and no rcciprocalts with othcr statcs, havc lowcr dcntistICC prcmiums. Holen s results arc alsoIC hypothcsis that licensing rcstrictionslicc prices, suggcsting a possiblc tradc-offcs and highcr quality.

angcd from a rccognition statc to atc bccausc of disciplinary problcms undcrI. Ninc of 142 dcntists liccnscd byc pcriod 1974 to 1984 had thcir dcntalor fclony convictions. Howcvcr, thc)f thc Ohio Statc Dcntal Board attributcsblcms to a lack of communication bctwccns rathcr than to thc rccognition systcm, Crcdcntials," 1985).

tcnt with thc hypothcsis that if thcserclaxcd, consumcrs would pay lowcr priccsproccdurcs and a lowcr avcragc pricc for a

sc lowcr prices would providc hundreds ofS in savings annually to consumcrs and to

havc concludcd that, at lowcr priccs,, morc dental scrviccs and that, as awould improvc. Thcsc conclusions are:c from thc cxtcnsivc quality literaturcdcntal auxilarics can pcrform someis wcll as dcntists can. This cvidcnccIploymcnt of additional hygicnists byucc thc quality of dental scrviccs.

thc remaining rcstrictions on auxiliaryIts do not offcr any uncquivocallic policy. On thc onc hand, pOlicyiy havc climinatcd most of thcsc:rcd thc rcmaining oncs incffcctual. Onjvcd models and data may bc nceded toons' cffccts. Morc rcscarch is calledscction, wc wil dcscribc somc possiblc

:arch.

uscful to know morc about thc production1ental scrvicc firm. Wc have tcstcd thcrcstriction on thc usc of an auxiliary for awil affcct thc cost of all scrviccs, Othcr

,ssiblc, howcver, and more work would hclpLg thcm.

knowlcdgc of optimal auxiliary utilization ins would allow morc accuratc . estimation ofimpact of auxiliary rcstrictions on largcticcs comparcd to solo practices. SuchI rcquirc lcss . aggrcgated data than arc

: quantity of dental scrviccs would pcrmitand demand cquations to bc cstimatcd.would scparate the possiblc cffccts of

mand , such as incrcascd waiting time , from,ply, such as decrcascd cfficicncy.

:y data would havc to be Icss aggrcgated'cvcl data uscd in this rcport: pcrhapsIdividual- firm- Icvcl data. Such data couldstudy rcgulatory rcstrictions on advcrtising

bcr of officcs that a dentist may opcratc.uxiliary usc rcstrictions, thcsc rcgulationsthc dclivcry of dcntal scrviccs by largcticcs. Bccausc all thcsc rcstrictions arcongcr cffccts wherc cntry is impcdcd, futurcaminc possiblc intcractions bctwccn thcon-rccognition of out-of-statc liccnscs.

logcnous. Thc modcl should probablyIsurancc variablc , bccausc of thc rapidsincc thc carly 1970s. This wouldlata on insurancc covcragc, which are

ns to bc donc on thc possiblc cffcctsquality of dcntal scrviccs. Onc

promising is tp cxaminc further thedcntal malpracticc prcmiums and

IS.

,:.

:t Reulbrc

!mcient

9B*

50.

52.

1.6 60*

1.8

"'.

69*

1.96

1.88 1.06 &0.

!'m a.ro with the preicted .ign at the five percent

TABLE A-

(or Ora Ex Pric

StandarEnor

3%.

-0.

66-

-0.

00.

ro with th. preicied lip ai th. fiv. IMf'nt

liio lUulto far

Coci

-0. 1.8

-o.

16.

-0,

07.

1.6

I.g7 oft.

tNnc from 88 witb the prete .ip at the flv. pe'

-0,

86.

72.

Z,s.71"

I.Z3

-o.

h the prected lien at the five percent

TABLE A-

lma.u for Fluorid8 PriC8 Equa&ioo, )Cotei8D& S'..dud

Enr

73-

-0, -0.

-0.

36' 1.3

-0,

-0, 88-

-4, -0,

0.32 1.22

lret ftlDHI with the pndded lian at the five percent

for I

26*

33.

-4.38*

25*

1.05

17*

ith the predicte .ign at the five percent

09.

1.61

54.

26.

:I aera with the preicted Bien at the five percent

"'''D1''I .. D

lit .mion (one IUrfac)

:it

1.6

66.

29.

1.22

m MIra with the prect8d aipl at the five percent

35.

1.03

06-

82-

1.26 45-

1.34

1m &era with the preicted sign at the five pen:ent

tAB

.Go

Et1r

l.7

1.62

1.72

1.40

43, 1.06

20,

rrth the preicted ,ign at tbe fiye perCent

31.

88, 1.03

16.

1.90

with tbe prected lign at the five percent

11.8

1.31

7S. .

8S.

1.84

01.

26,

11.

lro with the preided aicn at thefiye percent

TABL 13,

imatiop Rnulb for Averap Price Ec

Coefcient Standar""r

16.

1.04

1.4 65.

1.00 17*

1.2

1.07

ferent from sera wiLh Lhe preicted ,ill at the: five percent

04.

1.39

1.62

1.77

o with the preicted aign at the five percent

36.

t frm aera with the predicted sign at the five percent

lul

1.3

22*

31*

1.14

with the preict8 silO at the five percent

1.01#

1.9

46.

1.08

1.2

&era w,ththe preicted lign at

1.02

1.01

11.

ith the preicted ,ilD at the five percent

1.9

-0. -0.

8".

73.

l4.

1.9

, from Hra wit.h the prected lign at the five percent

I. A-ZO.

q. B.toion (t..ce EquUi, 1882

S,..dudEnr

:UIS.

t.h.precied aip .t. t.he five percent

TAB

_ulb for Ampeanent) PI

Iftcient

24'"

19'"

19. 06.

rom uro with the predic:ted lign a.t the five percent

60-

-0,

1.06 20.

18-

10. 98-

-0.

-0,

h tbe pndic&e .ip at tbe five percent

TABLE A-23,

.ulb lor Gold Inay Pri EqUUiOD , UNI2

icient Standar t-ratioErrr

1.75.

10. 1.30

16.

108,

19,

60,

m urawiib the preictedaian at the five percent

TABLE A-24.

ror Gol CroWD Pri

StODdarEmr

-0.

29-

80, 1.07

14.

44,

) wit.h t.h. preicted lip at the fiye percent

.alPI

1.26

1.67

49.

20.

27. 1.99

m uro with the preicted sign ..t th.e five percent

tABLE A-26.

Extration Pri

Stand8JEn.

67.

72.

1.4 41.

with the preicted lign at the five percent

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t 0