Regionalizing Cancer Surgery (R21)

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DESCRIPTION (provided by applicant): This project aims to predict the potential costs and benefits to patients of regionalizing two cancer operations: pancreaticoduoenectomy (the Whipple procedure) and colon cancer resection. Higher hospital procedure volume has been associated with lower mortality rates for these operations. These findings have led to recommendations to "regionalize" these surgical procedures--that is, to concentrate care at a select number of geographically dispersed, high-volume facilities. However, regionalization will reduce the number of hospitals performing surgery in each local market, leading to reduced hospital competition. Reduced competition could lead to higher prices for patients under age 65 requiring these surgeries. In past research, lower competition for patients between hospitals has also been associated with both higher hospital mortality and higher costs. The welfare impact of regionalization will depend upon which effects dominate--the value of the reduction in mortality and costs due to increased volume, or the increase in both prices and costs, and potential loss of quality competition due to consolidation of providers. This project seeks to: 1) Estimate the impact of increased market concentration on transaction prices, costs, and mortality rates for the Whipple procedure and colon cancer resections; 2) Estimate the impact of increased procedure volume on both inpatient mortality and costs per patient for these two procedures; 3) Use estimates from Aims 1 and 2 to predict the impact of regionalization of the Whipple procedure and colon cancer resections on mortality, costs, and prices; and, 4) Estimate the welfare impact of regionalization of these 2 complex cancer surgeries. The results will have important implications for determining the overall welfare consequences to patients of regionalizing these two complex cancer operations. The analyses will also serve as case studies to determine the value and feasibility of analyzing a wider range of surgeries using these methods.