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Title: Market Size and Trade in Medical Services

Citation Type: Miscellaneous

Publication Year: 2022

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Abstract: We quantify the roles of increasing returns and trade costs in medical services. Using data on millions of Medicare claims, we document that "imported" medical procedures-defined as a patient's consumption of a service produced by a medical provider in a different region-constitute about one-fifth of US healthcare consumption. Larger markets specialize in the production of less common procedures, and these procedures are more traded between regions. These patterns reflect economies of scale: larger regions produce higher-quality care because they serve more patients. Revealed-preference estimates of quality, which are positively related to external measures of quality of care, have a scale elasticity around 0.7. We use these estimates to evaluate the proximity-concentration tradeoff associated with various policy options for improving access to medical care.

Url: http://www.jdingel.com/research/DGLM_MSTMS.pdf

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Authors: Dingel, Joshua I.; Gottlieb, Joshua D.; Lozinski, Maya; Mourot, Pauline

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Data Collections: IPUMS USA

Topics: Population Health and Health Systems

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