How Does Competition Impact Prices for Dialysis Services? A Case Study of the US Dialysis Industry

Abstract: We examine whether and to what extent consolidation in the U.S. dialysis industry has affected prices negotiated between clinics and insurers. We make use of detailed facility data for the period 2000-2011, during which the market share of the two industry leaders increased from just over one-third to more than two-thirds.  We exploit the differential impact of two large national acquisitions on local market concentration to estimate the causal effect of concentration on private prices.  To construct local measures of private prices, we use insurance claims from over a million dialysis patients represented in data provided by the Health Care Cost Institute.  This project is a companion piece to a previous study, in which we found no statistically or economically significant effects of competition on various measures of dialysis quality or patient outcomes.