American Economic Journal:
Applied Economics
ISSN 1945-7782 (Print) | ISSN 1945-7790 (Online)
Physician Practice Organization and Negotiated Prices: Evidence from State Law Changes
American Economic Journal: Applied Economics
vol. 13,
no. 2, April 2021
(pp. 258–96)
Abstract
We study the relationship between physician organizational structures and prices negotiated with private insurers. Using variation caused by state-level judicial law changes, we show that a 10 percent increase in the enforceability of noncompete agreements (NCAs) causes 4.3 percent higher physician prices, and declines in practice sizes and concentration. Using two databases containing every physician establishment and firm between 1996 and 2007, linked to negotiated prices, we show that larger practices have lower prices for services with high fixed costs, consistent with economies of scale. In contrast, increases in firm concentration conditional on establishment concentration leads to higher prices.Citation
Hausman, Naomi, and Kurt Lavetti. 2021. "Physician Practice Organization and Negotiated Prices: Evidence from State Law Changes." American Economic Journal: Applied Economics, 13 (2): 258–96. DOI: 10.1257/app.20180078Additional Materials
JEL Classification
- D24 Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- G22 Insurance; Insurance Companies; Actuarial Studies
- I11 Analysis of Health Care Markets
- J44 Professional Labor Markets; Occupational Licensing
- K22 Business and Securities Law
- L13 Oligopoly and Other Imperfect Markets
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