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Product choice under price regulation: Evidence from out-patient dialysis markets

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  • Dai, Mian

Abstract

Using a dataset of dialysis facilities operating in more than 1000 U.S. counties in 2007, I examine the product choice of two types of firms: multiproduct dialysis facilities and single product dialysis facilities. I simulate the effect of a Medicare policy proposal in 2008 which reduces the regulated price of a common product that is produced by both types. I find that the policy decreases the number of single product dialysis facilities but increases the number of multiproduct facilities, holding patient behavior and provider cost structure constant. I also find strong evidence for market segmentation between single product and multiproduct dialysis facilities.

Suggested Citation

  • Dai, Mian, 2014. "Product choice under price regulation: Evidence from out-patient dialysis markets," International Journal of Industrial Organization, Elsevier, vol. 32(C), pages 24-32.
    • Handle: RePEc:eee:indorg:v:32:y:2014:i:c:p:24-32
    DOI: 10.1016/j.ijindorg.2013.10.006
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    References listed on IDEAS

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    1. Michael J. Mazzeo, 2002. "Product Choice and Oligopoly Market Structure," RAND Journal of Economics, The RAND Corporation, vol. 33(2), pages 221-242, Summer.
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    5. Catherine Schaumans & Frank Verboven, 2008. "Entry and regulation: evidence from health care professions," RAND Journal of Economics, RAND Corporation, vol. 39(4), pages 949-972, December.
    6. Ma, Ching-to Albert, 1994. "Health Care Payment Systems: Cost and Quality Incentives," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 3(1), pages 93-112, Spring.
    7. repec:bla:jemstr:v:3:y:1994:i:1:p:93-112:a is not listed on IDEAS
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    Cited by:

    1. Nathan E. Wilson, 2016. "For-profit status and industry evolution in health care markets: evidence from the dialysis industry," International Journal of Health Economics and Management, Springer, vol. 16(4), pages 297-319, December.

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    More about this item

    Keywords

    Dialysis; Entry; Competition;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

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