Specialization and Differentiation in the Out-Patient Dialysis Market

Posted: 6 May 2012

Date Written: April 27, 2012

Abstract

Using a dataset of dialysis facilities operating in more than 1,000 U.S. counties in 2007, we examine the competition between two types of firms: multiproduct dialysis facilities and single product dialysis facilities. We simulate the effect of a Medicare policy proposal in 2008 which reduces the regulated price for a common product that is produced by both types. We find that the policy decreases the number of single product dialysis facilities but increases the number of multi-product facilities. We also find strong evidence for market segmentation between single product and multiproduct dialysis facilities. The estimates imply the cross-product subsidization within the multiproduct dialysis units.

Keywords: Dialysis, Entry, Competition

JEL Classification: L13, I11

Suggested Citation

Dai, Mian, Specialization and Differentiation in the Out-Patient Dialysis Market (April 27, 2012). Available at SSRN: https://ssrn.com/abstract=2051574 or http://dx.doi.org/10.2139/ssrn.2051574

Mian Dai (Contact Author)

Drexel University ( email )

Philadelphia, PA 19104
United States

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