Market Size and Trade in Medical Services
We uncover substantial interregional trade in medical services and investigate the contribution of regional increasing returns. In Medicare, one-fifth of production involves a doctor treating a patient from another region. Larger regions produce greater quantity, quality, and variety of medical services, which they “export” to patients from elsewhere, especially smaller regions. We estimate regional quality based on patients’ travel choices, and these revealed-preference estimates align with clinical outcomes. Demographic-based instruments and a case study show that greater local demand increases quality and exports, consistent with economies of scale. We study counterfactual policies that lower travel costs rather than relocating production.
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Copy CitationJonathan I. Dingel, Joshua D. Gottlieb, Maya Lozinski, and Pauline Mourot, "Market Size and Trade in Medical Services," NBER Working Paper 31030 (2023), https://doi.org/10.3386/w31030.Download Citation
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