COMPETITION AND CROWDING OUT IN THE MARKET FOR OUTPATIENT SUBSTANCE ABUSE TREATMENT

U.S. markets for outpatient substance abuse treatment (OSAT) include for-profit, nonprofit, and public clinics. We study OSAT provision using new methods on equilibrium market structure in differentiated product markets. This allows us to describe clinics as heterogeneous in their objectives, their...

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Bibliographic Details
Published in:International economic review (Philadelphia) 2013-02, Vol.54 (1), p.159-184
Main Authors: Cohen, Andrew, Freeborn, Beth, McManus, Brian
Format: Article
Language:English
Subjects:
Clinics
Competition
Crowding-out effect
Drug abuse
Economic models
Financial market structures
Health outcomes
Health services
Market conditions
Market equilibrium
Market structure
Medical treatment
Methadone
Modeling
Nash equilibrium
Nonprofit hospitals
Nonprofit organizations
Outpatient care facilities
Product differentiation
Studies
Substance abuse
Substance abuse treatment
U.S.A
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Summary:U.S. markets for outpatient substance abuse treatment (OSAT) include for-profit, nonprofit, and public clinics. We study OSAT provision using new methods on equilibrium market structure in differentiated product markets. This allows us to describe clinics as heterogeneous in their objectives, their responses to exogenous market characteristics, and their responses to one another. Consistent with crowding out of private treatment, we find that markets with public clinics are less likely to have private clinics. In markets with low insurance coverage, low incomes, or high shares of nonwhite addicts, however, public clinics are relatively likely to be the sole willing providers of OSAT.
ISSN:0020-6598
1468-2354
DOI:10.1111/j.1468-2354.2012.00729.x