Measuring welfare from ambulatory surgery centers: a spatial analysis of demand for healthcare facilities

This paper studies competition between healthcare facilities, particularly between hospitals and ambulatory surgery centers (ASC's), in the market for outpatient surgery. The goal is to answer questions about the existence and magnitude of welfare gains earned from the use of ASC's. These questions are relevant to current policy debates about the usefulness of ASC's. I calculate welfare by specifying a multinomial logit model of consumer demand for healthcare facilities, and estimating structural elements of demand functions. Total elimination of ASC's results in between 10.2 and 28.1 minutes of welfare loss per patient surgery.