Physician Competition and the Provision of Care: Evidence from Heart Attacks

Monday, June 13, 2016: 10:15 AM
B21 (Stiteler Hall)

Author(s): Abe Dunn; Adam Shapiro

Discussant: Zack Cooper

We study the impact of competition among physicians on service provision and

patients’ health outcomes. We focus on cardiologists treating patients with a firsttime

heart attack treated in the emergency room. Physician concentration has a

small, but statistically significant effect on service utilization. A one-standard deviation

increase in cardiologist concentration causes a 5 percent increase in cardiologist

service provision. Cardiologists in more concentrated markets perform more intensive

procedures, particularly, diagnostic procedures—services in which the procedure

choice is more discretionary. Higher concentration also leads to fewer readmissions,

implying potential health benefits. These findings are potentially important for antitrust

analysis and suggest that changes in organizational structure in a market,

such as a merger of physician groups, not only influence the negotiated prices of

services, but also service provision.