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- W2120222995 abstract "This paper explores the effects of patient travel distance on hospital profit margins, with consideration to the effects of travel subsidies on hospital pricing. We develop a model in which hospital agglomeration leads to a negative relationship between profit margins and patient travel distance, challenging the standard IO theory that profit margins are higher for firms with greater distances of customer travel. Using data on patient visits and hospital finances from the California Office of Statewide Health Planning and Development (OSHPD), we test our theory and confirm that a hospital tends to have less pricing power if it draws patients from beyond its local cluster. We then consider how our results might justify the subsidizing of patient travel by insurers and government payers. Lastly, we present an argument for why the ubiquitous Hirschman-Herfindahl index of market concentration can be robust to owner and system-level hospital cooperation." @default.
- W2120222995 created "2016-06-24" @default.
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- W2120222995 date "2013-01-01" @default.
- W2120222995 modified "2023-09-26" @default.
- W2120222995 title "The Role of Competition and Patient Travel in Hospital Profits: Why Health Insurers Should Subsidize Patient Travel" @default.
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