dkritz

Hospital bed provision levels, market concentration, and growth opportunities

Market opportunities v. market concentration

Within any healthcare or hospital service area, there is a certain level of provision of hospital beds.

The fewer the beds, the more upside there is for an individual system that increases its number of beds.

Ceteris paribus, more beds implies more market competition. Nevertheless, at any level of provision, the degree of concentration of beds across health provider systems could be high or low.

Depending on the underprovision or overprovision of beds, systems will need different growth strategy advice.

dkritz

Market power in the hospital industry

Abstract

We propose to investigate the profitability of the hospital industry in California. Does the industry exhibit scale effects with respect to system size? Does the trend towards consolidation in the hospital market lead to profits for the owners, and higher prices for consumers? We fail to find strong evidence for this but more work is needed to make any definite conclusion.

Introduction

In 1960, the United States spent 5% of GDP on health care. That grew to 10% by 1985, and 15% by 2003. In 2019, the United States spent 16.9% of GDP on healthcare, the highest share of output in the OECD, and roughly twice the per capita expenditure of the OECD average. $1.2T of the $3.8T expenditure, or about a third, went to hospital care.

With the cost of health care eating up a growing share of economic output, the market behavior of significant actors in the health care industry has drawn increasing criticism. One of these trends has been the consolidation of hospita

dkritz

WIRED

Why the Future Doesn't Need Us

BILL JOY

IDEAS

04.01.2000 12:00 PM

dkritz

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