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Provider responses to market entry under competing health technologies

Author

Listed:
  • Daniel Avdic

    (Centre for Health Economics Research and Evaluation, University of Technology Sydney)

  • Bo Lagerqvist

    (UCR and SCAAR Study Group, Uppsala University)

  • Nils Gutacker

    (Centre for Health Economics, University of York)

  • Giovanni van Empel

    (Department of Health Economics, Wellbeing, and Society, The Australian National University)

  • Johan Vikström

    (IFAU, Uppsala University)

Abstract

We study how multi-technology hospitals respond to market entry of single-technology competitors using a rescindment of regulations for heart attack treatments that prompted a rapid expansion of catheterization laboratories (cath labs) in Sweden. We isolate supply-side effects by exploiting that patients can-not choose their hospital and compare outcomes of cardiac patients residing in areas affected and unaffected by provider market entry, respectively. We show that patients with indications for cardiac surgery were more likely to receive catheter-based treatment after a cath lab opened in their hospital, and document increases in adverse health outcomes for inframarginal patients. Incumbent hospitals responded to this demand reallocation by augmenting their own demand for surgery, but to a lesser extent and without patient health consequences.

Suggested Citation

  • Daniel Avdic & Bo Lagerqvist & Nils Gutacker & Giovanni van Empel & Johan Vikström, 2025. "Provider responses to market entry under competing health technologies," Papers 2025-10, Centre for Health Economics, Monash University.
    • Handle: RePEc:mhe:chemon:2025-10
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    More about this item

    Keywords

    hospitals; market entry; technological substitution; supplier-induced demand; heart attacks;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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