PHYSICIAN MARKET CONCENTRATION AND PATIENT WELFARE : AN EXAMINATION OF MEDICARE BENEFICIARIES

We consider the effects that local cardiology market structure has on utilization and health outcomes for four patient populations with specific cardiac conditions. We find that an increase in concentration leads to statistically and economically significant increases in the likelihood of negative health outcomes. For example, we find that moving from a zip-code around the 25th percentile of cardiology market concentration during our sample to one around the 75th percentile would be associated with around 0.2-0.3 percentage point increase in risk-adjusted mortality in three of our patient populations. We also find that patients in more concentrated markets utilized more health care. For example, moving from a zip-code at the 25th percentile of cardiology market concentration to one at the 75th would be associated with an 18% to 31% increase in total expenditures. Overall, our analysis implies an increase in cardiology market concentration is associated with worse outcomes for patients without offsetting clinical efficiencies.

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