Physician Competition and the Provision of Care: Evidence from Heart Attacks

Abstract

We study the impact of competition among physicians on service provision and patients' health outcomes for the US commercial market. We focus on cardiologists treating patients with a first-time heart attack treated in the emergency room. Physician concentration has a small but statistically significant effect on service utilization. Cardiologists in more concentrated markets perform more intensive procedures, particularly diagnostic procedures—services in which the procedure choice is more discretionary. Higher concentration leads to fewer readmissions but has no effect on mortality. These findings suggest that changes in organizational structure, such as a merger of physician groups, influence not only the negotiated prices of services, but also service provision.