Do physicians employ aides efficiently ?: Some new evidence on solo practitioners

This paper investigates the issue of efficient employment of aides in the production of medical care services by self-employed solo practice physicians. Several alternative specifications of the production function for physician services are estimated. The parameter estimates obtained are then used to draw inferences about medical care delivery technology and allocation efficiency. The findings suggest that solo practice physicians overemploy aides and in so doing neither maximize medical practice profit nor minimize the cost of delivering medical care services.