Fatal Attraction: health care agglomeration and its consequences

Stephen Sheppard and Michael Hellstern
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Michael Hellstern: Williams College

No 2014-05, Department of Economics Working Papers from Department of Economics, Williams College

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.

Keywords: Health; agglomeration; nonprofits (search for similar items in EconPapers)
JEL-codes: I11 L30 R38 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2014-11, Revised 2014-11
New Economics Papers: this item is included in nep-geo, nep-hea and nep-ure
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