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Fatal Attraction: health care agglomeration and its consequences

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Abstract

In this paper we focus on a fundamental tension between the economies of agglomeration available to health care organizations and the impacts of spatial concentration of health care organizations on overall health outcomes. We identify plausible measures of health care concentration and dispersion, and adapt them to the US urban context. We calculate these measures for nonprofit health organizations for all US metropolitan areas from 1989 to 2009. We use these data to test for signs that agglomeration economies are important for these organizations. We use mortality rates to serve as an indicator of health outcomes, and provide an analysis of the impacts of agglomeration on health outcomes in US cities. This analysis highlights some disturbing results. The analysis suggests that health care organizations in US cities are more clustered than desirable for achieving the best health outcomes.

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  • Stephen Sheppard & Michael Hellstern, 2014. "Fatal Attraction: health care agglomeration and its consequences," Department of Economics Working Papers 2014-05, Department of Economics, Williams College, revised Nov 2014.
    • Handle: RePEc:wil:wileco:2014-05
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    1. Laurie J. Bates & Rexford E. Santerre, 2005. "Do Agglomeration Economies Exist in the Hospital Services Industry," Eastern Economic Journal, Eastern Economic Association, vol. 31(4), pages 617-628, Fall.
    2. Gilles Duranton & Henry G. Overman, 2008. "Exploring The Detailed Location Patterns Of U.K. Manufacturing Industries Using Microgeographic Data," Journal of Regional Science, Wiley Blackwell, vol. 48(1), pages 213-243, February.
    3. Billings, Stephen B. & Johnson, Erik B., 2016. "Agglomeration within an urban area," Journal of Urban Economics, Elsevier, vol. 91(C), pages 13-25.
    4. Li, Jing, 2014. "The influence of state policy and proximity to medical services on health outcomes," Journal of Urban Economics, Elsevier, vol. 80(C), pages 97-109.
    5. Li, Jing, 2013. "Intermediate input sharing in the hospital service industry," Regional Science and Urban Economics, Elsevier, vol. 43(6), pages 888-902.
    6. Buchmueller, Thomas C. & Jacobson, Mireille & Wold, Cheryl, 2006. "How far to the hospital?: The effect of hospital closures on access to care," Journal of Health Economics, Elsevier, vol. 25(4), pages 740-761, July.
    7. Sundmacher, Leonie & Busse, Reinhard, 2011. "The impact of physician supply on avoidable cancer deaths in Germany. A spatial analysis," Health Policy, Elsevier, vol. 103(1), pages 53-62.
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    1. Shoshana Y Kahana & Richard A Jenkins & Douglas Bruce & Maria I Fernandez & Lisa B Hightow-Weidman & Jose A Bauermeister & Adolescent Medicine Trials Network for HIV/AIDS Interventions, 2016. "Structural Determinants of Antiretroviral Therapy Use, HIV Care Attendance, and Viral Suppression among Adolescents and Young Adults Living with HIV," PLOS ONE, Public Library of Science, vol. 11(4), pages 1-19, April.

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    More about this item

    Keywords

    Health; agglomeration; nonprofits;
    All these keywords.

    JEL classification:

    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • L30 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - General

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