How Do Regulations and Technology Affect Service Allocation and Market Structure?

Abstract

The paper estimates the effects of Price Controls and Cost Controls on healthcare service quantity and their role in spatial restructuring of physician market. Exploiting the quasi-experimental variation in regulatory-technological environment generated by telehealth parity laws and broadband internet, I find that for aggregate sample and metro areas, Price Floor has a conducive effect on service quantity and physician density, amplified progressively with broadband, and Price Ceiling, unfavorable at mean broadband, converges to the same conducive effect as broadband rises, while Cost Parity has an unfavorable effect, with a negative broadband gradient. For non-metro areas, Price Floor and Price Ceiling have conducive effect on service quantity and unfavorable effect on physician density, indicating efficiency gains.