Publication Type

Journal Article

Version

publishedVersion

Publication Date

12-2015

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.

Keywords

Agglomeration, Health care, Input sharing

Discipline

Health Economics

Research Areas

Applied Microeconomics

Publication

Health Economics Review

Volume

5

Issue

38

First Page

38

Last Page

52

ISSN

2191-1991

Identifier

10.1186/s13561-015-0075-1

Copyright Owner and License

Authors

Comments

Initial Review Stage Journal of Regional Science

Additional URL

https://doi.org/10.1186/s13561-015-0075-1

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