Health Economics, Policy and Law

Articles

Cooperation and conflict between very similar occupations: the case of anesthesia

David E. Kalista1, Noelle A. Molinaria2 and Stephen J. Spurra3 c1

a1 Associate Professor, Department of Economics, Shippensburg University, Shippensburg, PA, USA

a2 Research Economist, Department of Economics, Wayne State University, Detroit, MI, USA

a3 Professor of Economics, Department of Economics, Wayne State University, Detroit, MI, USA

Abstract

This article examines the features of a labor market in which there are two professional groups that both cooperate and directly compete with each other: certified registered nurse anesthetists (CRNAs) and anesthesiologists (MDAs). We examine how the relative numbers of these two types of anesthesia providers, and differences in regulation, affect the earnings of CRNAs, and the extent of supervision of CRNAs by MDAs. We find that both the earnings, and the likelihood of medical supervision of CRNAs, are closely determined by their market share. As the market share of CRNAs increases from 0% to 50%, the gains to MDAs from restricting competition increase; over this range the likelihood that CRNAs are supervised increases and their expected earnings decline. However, as the CRNAs’ market share increases beyond 50%, the costs to MDAs of anticompetitive measures become too large, therefore, the probability of supervision declines, and the earnings of CRNAs increase.

(Online publication June 25 2010)

Correspondence:

c1 Correspondence to: Stephen J. Spurr, Professor of Economics, Department of Economics, 2115 FAB, Wayne State University, 656 West Kirby, Detroit, MI 48202-3622, USA. Email: sspurr@wayne.edu