Market Power, Transactions Costs, and the Entry of Accountable Care Organizations in Health Care
Christopher Whaley (),
Benjamin Handel (),
Liora Bowers (),
Carol Simon () and
Review of Industrial Organization, 2015, vol. 47, issue 2, 167-193
ACOs were promoted in the 2010 Patient Protection and Affordable Care Act (ACA) to incentivize integrated care and cost control. Because they involve vertical and horizontal collaboration, ACOs also have the potential to harm competition. In this paper, we analyze ACO entry and formation patterns with the use of a unique, proprietary database that includes public (Medicare) and private ACOs. We estimate an empirical model that explains county-level ACO entry as a function of: physician, hospital, and insurance market structure; demographics; and other economic and regulatory factors. We find that physician concentration by organization has little effect. In contrast, physician concentration by geographic site—which is a new measure of locational concentration of physicians—discourages ACO entry. Hospital concentration generally has a negative effect. HMO penetration is a strong predictor of ACO entry, while physician-hospital organizations have little effect. Small markets discourage entry, which suggests economies of scale for ACOs. Predictors of public and private ACO entry are different. State regulations of nursing and the corporate practice of medicine have little effect. Copyright Springer Science+Business Media New York 2015
Keywords: Health care competition; Antitrust; Entry; Integration; Accountable care organizations; Transactions costs; Obama plan; L 14; I11; L44; I18; L41 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed
Downloads: (external link)
Access to full text is restricted to subscribers.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:kap:revind:v:47:y:2015:i:2:p:167-193
Ordering information: This journal article can be ordered from
http://www.springer. ... on/journal/11151/PS2
Access Statistics for this article
Review of Industrial Organization is currently edited by L.J. White
More articles in Review of Industrial Organization from Springer, The Industrial Organization Society Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().