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Physician Competition and the Provision of Care: Evidence from Heart Attacks

Author

Listed:
  • Abe Dunn

    (Bureau of Economic Analysis)

  • Adam Hale Shapiro

    (Federal Reserve Bank of San Francisco adam.shapiro@sf.frb.org Author email: adam.shapiro@sf.frb.org)

Abstract

We study the impact of competition among physicians on service provision and patients' health outcomes for the US commercial market. We focus on cardiologists treating patients with a first-time heart attack treated in the emergency room. Physician concentration has a small but statistically significant effect on service utilization. Cardiologists in more concentrated markets perform more intensive procedures, particularly diagnostic procedures—services in which the procedure choice is more discretionary. Higher concentration leads to fewer readmissions but has no effect on mortality. These findings suggest that changes in organizational structure, such as a merger of physician groups, influence not only the negotiated prices of services, but also service provision.

Suggested Citation

  • Abe Dunn & Adam Hale Shapiro, 2018. "Physician Competition and the Provision of Care: Evidence from Heart Attacks," American Journal of Health Economics, University of Chicago Press, vol. 4(2), pages 226-261, Spring.
    • Handle: RePEc:ucp:amjhec:v:4:y:2018:i:2:p:226-261
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    File URL: https://www.journals.uchicago.edu/doi/pdf/10.1162/ajhe_a_00099
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    Cited by:

    1. Abe Dunn & Joshua D. Gottlieb & Adam Shapiro & Daniel J. Sonnenstuhl & Pietro Tebaldi, 2021. "A Denial a Day Keeps the Doctor Away," NBER Working Papers 29010, National Bureau of Economic Research, Inc.
    2. Jihui Chen, 2019. "The Effects of Competition on Prescription Payments in Retail Pharmacy Markets," Southern Economic Journal, John Wiley & Sons, vol. 85(3), pages 865-898, January.
    3. Jeannette Brosig‐Koch & Burkhard Hehenkamp & Johanna Kokot, 2017. "The effects of competition on medical service provision," Health Economics, John Wiley & Sons, Ltd., vol. 26(S3), pages 6-20, December.
    4. Raymond J. March, 2017. "Entrepreneurship in Off-Label Drug Prescription: Just What the Doctor Ordered!," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 32(Fall 2017), pages 75-92.
    5. Jeannette Brosig‐Koch & Burkhard Hehenkamp & Johanna Kokot, 2023. "Who benefits from quality competition in health care? A theory and a laboratory experiment on the relevance of patient characteristics," Health Economics, John Wiley & Sons, Ltd., vol. 32(8), pages 1785-1817, August.
    6. Christopher S. Brunt & Joshua R. Hendrickson & John R. Bowblis, 2020. "Primary care competition and quality of care: Empirical evidence from Medicare," Health Economics, John Wiley & Sons, Ltd., vol. 29(9), pages 1048-1061, September.

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    More about this item

    Keywords

    competition; quality; utilization; physician markets;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General

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