Entry Deterrence in Hospital Procedure Markets: A Simple Model of Learning-By-Doing / Leemore S. Dafny.

Format:

Book

Author/Creator:

Dafny, Leemore S.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w9871.

NBER working paper series no. w9871

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Entry Deterrence in Hospital Procedure Markets

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2003.

Summary:

This paper examines the strategic behavior of hospitals in one of their primary output markets: inpatient surgical procedures. High levels of learning-by-doing in surgical fields may act as a barrier to entry. I investigate whether incumbent hospitals facing prospective entry in a procedure market manipulate their procedure volumes to produce such a barrier. I derive straightforward empirical tests from a model of patient demand, procedure quality, and differentiated product competition. Using hospital data on electrophysiological studies, an invasive cardiac procedure, I find evidence of entry-deterring investment in procedure volume. These findings suggest that competitive motivations may play a role in treatment decisions.

Notes:

Print version record

July 2003.