IDEAS home Printed from
   My bibliography  Save this paper

Does Competition from Ambulatory Surgical Centers Affect Hospital Surgical Output and Hospital Profit?


  • Plotzke, Michael

    () (Abt Associates, Inc.)

  • Courtemanche, Charles

    () (University of North Carolina at Greensboro, Department of Economics)


Hospital administrators have expressed concern that ambulatory surgical centers (ASCs) lower the profitability of hospitals' outpatient departments by reducing their volume and cherry picking their most profitable patients. This could lead to welfare losses by causing hospitals to reduce their provision of less profitable services such as uncompensated care. This paper estimates the effects of ASC prevalence on hospital surgical volume and profit margins using hospital and year fixed effects models with a variety of robustness checks. We show that ASC entry only appears to influence a hospital's outpatient volume if the facilities are within a few miles of each other. Even then, the average reduction in hospital volume is a modest 2-4%, although the effect is stronger for large ASCs and the first ASCs to enter the market. We find no evidence that entering ASCs reduce a hospital's outpatient profit margins, inpatient surgical volume, or inpatient profit margins. In most cases, our results suggest that competition from ASCs does not cause serious financial harm to hospitals.

Suggested Citation

  • Plotzke, Michael & Courtemanche, Charles, 2009. "Does Competition from Ambulatory Surgical Centers Affect Hospital Surgical Output and Hospital Profit?," UNCG Economics Working Papers 09-6, University of North Carolina at Greensboro, Department of Economics.
  • Handle: RePEc:ris:uncgec:2009_006

    Download full text from publisher

    File URL:
    File Function: Full text
    Download Restriction: no

    References listed on IDEAS

    1. Link, Albert N, 1980. "Firm Size and Efficient Entrepreneurial Activity: A Reformulation of the Schumpeter Hypothesis," Journal of Political Economy, University of Chicago Press, vol. 88(4), pages 771-782, August.
    2. Hall, Bronwyn H. & Mairesse, Jacques & Mohnen, Pierre, 2010. "Measuring the Returns to R&D," Handbook of the Economics of Innovation, Elsevier.
    3. Link, Albert N, 1981. "Basic Research and Productivity Increase in Manufacturing: Additional Evidence," American Economic Review, American Economic Association, vol. 71(5), pages 1111-1112, December.
    4. Link, Albert N., 1983. "Inter-firm technology flows and productivity growth," Economics Letters, Elsevier, vol. 11(1-2), pages 179-184.
    5. Albert N. Link & John T. Scott, 2013. "The theory and practice of public-sector R&D economic impact analysis," Chapters,in: Handbook on the Theory and Practice of Program Evaluation, chapter 2, pages 15-55 Edward Elgar Publishing.
    6. Robert Atkinson, 2007. "Expanding the R&E tax credit to drive innovation, competitiveness and prosperity," The Journal of Technology Transfer, Springer, vol. 32(6), pages 617-628, December.
    7. Albert N. Link, 1982. "Productivity Growth, Environmental Regulations and the Composition of R&D," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 548-554, Autumn.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Ralf Dewenter & Thomas Jaschinski & Björn A. Kuchinke, 2013. "Hospital Market Concentration and Discrimination of Patients," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 133(3), pages 345-374.

    More about this item


    Ambulatory Surgical Center; Hospital Competition; Physician Ownership; Hospital Profit;

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:uncgec:2009_006. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Albert Link). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.