The impact of vendorship legislation and interprofessional competition in the market for social workers' services

Abstract

The results of this article suggest that, in the short run, vendorship legislation will not result in a large shift of social workers from organized settings into private practice. However, vendorship legislation appears to increase the number of social workers in private practice in areas that have not attracted as many psychiatrists. Thus, vendorship may have a favorable impact on the geographic distribution of mental health providers. Vendorship legislation may result in increases in private practice social workers in underserved areas. The results also suggest that social workers and psychiatrists compete in the market for mental health services. In counties with higher psychiatrist-to-population ratios, fees for social workers' services are lower. Further, in counties with higher psychiatrist-to-population ratios, the number of social workers in private practice decreased after vendorship. Finally, there is a large range of optimal practice size for social workers. Social workers with 20 or more clients per month can provide mental health services at the lowest average cost per client. Thus social workers operating either full-time or part-time practices with more than 20 clients per month can provide mental health services efficiently.