Defining Hospital Markets – An Application to the German Hospital Sector

27 Pages Posted: 25 Jul 2014

See all articles by Corinna Hentschker

Corinna Hentschker

Rhine-Westphalia Institute for Economic Research (RWI-Essen)

Andreas Schmid

University of Bayreuth

Roman Mennicken

Landschaftsverband Rheinland

Date Written: January 1, 2014

Abstract

The correct definition of the product market and of the geographic market is a prerequisite for assessing market structures in antitrust cases. For hospital markets, both dimensions are controversially discussed in the literature. Using data for the German hospital market we aim at elaborating the need for differentiating the product market and at investigating the effects of different thresholds for the delineation of the geographic market based on patient flows. Thereby we contribute to the scarce empirical evidence on the structure of the German hospital market. We find that the German hospital sector is highly concentrated, confirming the results of a singular prior study. Furthermore, using a very general product market definition such as “acute in-patient care” averages out severe discrepancies that become visible when concentration is considered on the level of individual diagnoses. In contrast, varying thresholds for the definition of the geographic market has only impact on the level of concentration, while the correlation remains high. Our results underline the need for more empirical research concerning the definition of the product market for hospital services.

Keywords: Hospital market; concentration; product market; geographic market; Germany

JEL Classification: L11, I11

Suggested Citation

Hentschker, Corinna and Schmid, Andreas and Mennicken, Roman, Defining Hospital Markets – An Application to the German Hospital Sector (January 1, 2014). Available at SSRN: https://ssrn.com/abstract=2470529 or http://dx.doi.org/10.2139/ssrn.2470529

Corinna Hentschker

Rhine-Westphalia Institute for Economic Research (RWI-Essen) ( email )

Hohenzollernstr. 1-3
Essen, 45128
Germany

Andreas Schmid (Contact Author)

University of Bayreuth ( email )

Universitatsstr 30
Bayreuth, D-95447
Germany

Roman Mennicken

Landschaftsverband Rheinland ( email )

Kennedy-Ufer 2
Cologne, 50679
Germany

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