How Does Competition Impact the Quality of Health Care? A Case Study of the U.S. Dialysis Industry

David Cutler; Leemore S Dafny; Christopher J Ody

How Does Competition Impact the Quality of Health Care? A Case Study of the U.S. Dialysis Industry

David Cutler, Leemore S Dafny, Christopher J Ody

Strategy

Research output: Working paper

Abstract

We examine whether and to what extent consolidation in the largely for-profit U.S. dialysis industry has affected patient outcomes and clinical practices. We make use of detailed facility data for the period 2000-2009, during which the market share of the two industry leaders increased from just over one-third to nearly two-thirds. We exploit the differential impact of two large national acquisitions on local market concentration to estimate the causal effect of concentration on a broad set of measures, including mortality rates, dialysis adequacy, and staffing ratios. We find no statistically or economically significant effects of competition on any measure. Preliminary analysis suggests consolidation may have led to higher prices for privately-insured patients.

Original language	English (US)
Number of pages	55
State	Published - Sep 2012

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http://www.kellogg.northwestern.edu/faculty/dafny/personal/Documents/Publications/16_Dafny_How%20Does%20Competition%20Impact%20the%20Quality%20of%20Health%20Care%20-%20Dialysis.pdf

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abstract = "We examine whether and to what extent consolidation in the largely for-profit U.S. dialysis industry has affected patient outcomes and clinical practices. We make use of detailed facility data for the period 2000-2009, during which the market share of the two industry leaders increased from just over one-third to nearly two-thirds. We exploit the differential impact of two large national acquisitions on local market concentration to estimate the causal effect of concentration on a broad set of measures, including mortality rates, dialysis adequacy, and staffing ratios. We find no statistically or economically significant effects of competition on any measure. Preliminary analysis suggests consolidation may have led to higher prices for privately-insured patients. ",

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