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Fatal Attraction: health care agglomeration and its consequences

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Abstract

In this paper we focus on a fundamental tension between the economies of agglomeration available to health care organizations and the impacts of spatial concentration of health care organizations on overall health outcomes. We identify plausible measures of health care concentration and dispersion, and adapt them to the US urban context. We calculate these measures for nonprofit health organizations for all US metropolitan areas from 1989 to 2009. We use these data to test for signs that agglomeration economies are important for these organizations. We use mortality rates to serve as an indicator of health outcomes, and provide an analysis of the impacts of agglomeration on health outcomes in US cities. This analysis highlights some disturbing results. The analysis suggests that health care organizations in US cities are more clustered than desirable for achieving the best health outcomes.

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  • Stephen Sheppard & Michael Hellstern, 2014. "Fatal Attraction: health care agglomeration and its consequences," Department of Economics Working Papers 2014-05, Department of Economics, Williams College, revised Nov 2014.
    • Handle: RePEc:wil:wileco:2014-05
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    Keywords

    Health; agglomeration; nonprofits;
    All these keywords.

    JEL classification:

    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • L30 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - General

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