NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Is Hospital Competition Socially Wasteful?

Daniel P. Kessler, Mark B. McClellan

NBER Working Paper No. 7266
Issued in July 1999
NBER Program(s):   HC

We study the consequences of hospital competition for Medicare beneficiaries' heart attack care from 1985 to 1994. We examine how relatively exogenous determinants of hospital choice such as travel distances influence the competitiveness of hospital markets, and how hospital competition interacts with the influence of managed care organizations to affect the key determinants of social welfare expenditures on treatment and patient health outcomes. In the 1980s, the welfare effects of competition were ambiguous; but in the 1990s, competition unambiguously improves social welfare. Increasing HMO enrollment over the sample period partially explains the dramatic change in the impact of hospital competition.

download in pdf format
   (112 K)

email paper

A non-technical summary of this paper is available in the March 2000 NBER digest.  You can sign up to receive the NBER Digest by email.

The NBER Bulletin on Aging and Health provides summaries of publications like this.  You can sign up to receive the NBER Bulletin on Aging and Health by email.

This paper is available as PDF (112 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w7266

Published: Kessler, Daniel P. and Mark B. McClellan. "Is Hospital Competition Socially Wasteful?," Quarterly Journal of Economics, 2000, v115(2,May), 577-615.

Users who downloaded this paper also downloaded these:
Gaynor w12301 What Do We Know About Competition and Quality in Health Care Markets?
Gaynor, Moreno-Serra, and Propper w16164 Death by Market Power: Reform, Competition and Patient Outcomes in the National Health Service
Bloom, Propper, Seiler, and Van Reenen w16032 The Impact of Competition on Management Quality: Evidence from Public Hospitals
Kessler and Geppert w11226 The Effects of Competition on Variation in the Quality and Cost of Medical Care
Dranove, Kessler, McClellan, and Satterthwaite w8697 Is More Information Better? The Effects of 'Report Cards' on Health Care Providers
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us