Market Size and Trade in Medical Services

Jonathan Dingel, Joshua Gottlieb, Maya Lozinski and Pauline Mourot

No 18029, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We measure the importance of increasing returns to scale and trade in medical services. Using Medicare claims data, we document that “imported†medical care — services produced by a medical provider in a different region — constitute about one-fifth of US healthcare consumption. Larger regions specialize in producing less common procedures, which are traded more. These patterns reflect economies of scale: larger regions produce higher-quality services because they serve more patients. Because of increasing returns and trade costs, policies to improve access to care face a proximity-concentration tradeoff. Production subsidies and travel subsidies can impose contrasting spillovers on neighboring regions.

Keywords: Market access; Medical practice; Trade in services; Healthcare (search for similar items in EconPapers)
JEL-codes: F12 F14 I11 R12 (search for similar items in EconPapers)
Date: 2023-03
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Working Paper: Market Size and Trade in Medical Services (2023)
Working Paper: Market Size and Trade in Medical Services (2023)
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