The impact of agglomeration economies on hospital input prices

Andrew Friedson and Jing Li ()

Health Economics Review, 2015, vol. 5, issue 1, 1-15

Abstract: This paper examines the extent to which agglomeration of the hospital service industry enhances the productivity of producing health care. Specifically, we use a large set of private insurance claims from the FAIR Health database to show that an increasing spatial concentration of hospital services results in a decreased cost of obtaining intermediate medical services. We explicitly test whether the reduced cost at concentrated locations arises from the ability to share intermediate service providers. The identification relies on state variation in medical lab technician licensure requirements, which influence the cost of intermediate services only through the cost of running a lab. Our findings suggest that agglomeration of the hospital service industry attracts specialized medical labs, which in turn help to reduce the cost of producing laboratory tests. Copyright Friedson and Li. 2015

Keywords: Agglomeration; Health care; Input sharing; R00; I11; L23 (search for similar items in EconPapers)
JEL-codes: I11 L23 R00 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://hdl.handle.net/10.1186/s13561-015-0075-1 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:hecrev:v:5:y:2015:i:1:p:1-15:10.1186/s13561-015-0075-1

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/13561

DOI: 10.1186/s13561-015-0075-1

Access Statistics for this article

Health Economics Review is currently edited by J. Matthias Graf von der Schulenburg

More articles in Health Economics Review from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().