title: For-profit status and industry evolution in health care markets: evidence from the dialysis industry.
abstract: This paper examines why for-profit dialysis providers have displaced non-profit providers over the last 25 years. Using detailed data on individual markets' evolutions, I find that for-profit facilities were quicker to enter growing markets and slower to exit declining ones than non-profit facilities. Moreover, for-profit providers' presence in a market had a larger impact on the exit and entry behavior of competitors. These results suggest that for-profit dialysis providers have an advantage in static competition relative to non-profit providers, and that this-rather than lower entry costs-explains their increasing prominence. Additional empirical analyses indicate that for-profits' advantage cannot solely be attributed to efficiencies related to membership in a large, multi-facility chain. This further suggests that managerial incentives have had an economically significant impact on long-run market structure in this industry.
authors.affiliation: Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC, 20580, USA. nwilson@ftc.gov.
authors.forename: Nathan E
authors.identifier: http://orcid.org/0000-0001-5548-9796
authors.initials: NE
authors.lastname: Wilson
mesh_terms: D000554:Ambulatory Care Facilities / Q000191:economics*; D003956:Dialysis; D004465:Economic Competition; D019981:Health Care Sector; D006269:Health Facilities, Proprietary / Q000191:economics*; D006278:Medicare; D009939:Organizations, Nonprofit; D010067:Ownership; D006435:Renal Dialysis / Q000191:economics*; D014481:United States
keywords: Dialysis; For-profit status; Market dynamics; Organizational structure