There are a number of studies that show that physicians face a lot of pressure to not deny patients antibiotics. A common excuse for prescribing is that “if I don’t prescribe an antibiotic then the patient is just going to find another doctor who will”. Many of these are self-reported studies and it's not clear if physicians were offering the excuse of patient pressure ex-post to justify their prescribing behavior or if there really was an effect. But a recent study by Bennett, Lauderdale and Hung that uses data from Taiwan finds that there may be something to the competition story. All else being equal, one might expect that physicians operating in relatively more competitive markets would be more likely to prescribe antibiotics. And that’s what they find. An increase of one standard deviation in competition was associated with a 2.4 percent increase in antibiotic use and a 11.5 percent increase in resistance in that market. The additional cost of that increased competition was $1.36 billion!

Editor's Note: Mike Eber wrote about this paper a while ago and pointed out some interesting rationale: "...physicians who change their prescribing practices as a result of competition do so because they believe that they are benefitting patients in the long run, because if these patients were to become seriously ill, they would still be under the care of responsible physicians rather than under the care of irresponsible physicians (judged of lesser quality by their willingness to overprescribe in the absence of competition). In this way, patients and physicians are both acting based on their perceptions of physician quality signaled by antibiotic prescribing."