Do competition and managed care improve quality?

Does competition support integrated care to improve quality?

Introduction

This work investigates the compatibility of integrated care and competition in China and analyses the impact of integrated care on regional care quality (DeptQ) within a competitive framework.

Method

The study was built on multivariate correspondence analysis and a two-way fixed-effects model. The data were collected from Xiamen's Big Data Application Open Platform and represent nine specialised departments that regularly performed inter-institutional referrals between 2016 and 2019.

Results

First, care quality for referred patients (ReferQ) and the relative scale of referred patients (ReferScale) and competition have an antagonistic but not completely mutually exclusive relationship. Second, ReferQ and competition both have a significant effect on DeptQ, but only when competition is weak can ReferQ and competition act synergistically on DeptQ. When competition is fierce, competition will weaken the impact of ReferQ on DeptQ.

Conclusion

Changes in the intensity of integrated care and competition ultimately affect care quality.

An econometric approach to aggregating multiple cardiovascular outcomes in German hospitals

OBJECTIVE

Development of an aggregate quality index to evaluate hospital performance in cardiovascular events treatment.

METHODS

We applied a two-stage regression approach using an accelerated failure time model based on variance weights to estimate hospital quality over four cardiovascular interventions: elective coronary bypass graft, elective cardiac resynchronization therapy, and emergency treatment for acute myocardial infarction. Mortality and readmissions were used as outcomes. For the estimation we used data from a statutory health insurer in Germany from 2005 to 2016.

RESULTS

The precision-based weights calculated in the first stage were higher for mortality than for readmissions. In general, teaching hospitals performed better in our ranking of hospital quality compared to non-teaching hospitals, as did private not-for-profit hospitals compared to hospitals with public or private for-profit ownership.

DISCUSSION

The proposed approach is a new method to aggregate single hospital quality outcomes using objective, precision-based weights. Likelihood-based accelerated failure time models make use of existing data more efficiently compared to widely used models relying on dichotomized data. The main advantage of the variance-based weights approach is that the extent to which an indicator contributes to the aggregate index depends on the amount of its variance.

The evolution and inter-sectoral interaction mechanism of China's national medical alliance: An analysis based on complex systems theory

This work investigates the performance and inter-sectoral interaction mechanism of China's largest vertically integrated care network, the national medical alliance (NMA). The data collected derive from the China Health Statistics Bulletin and the China Health Statistical Yearbook for the period 2009-2018. The data include 64 observation indicators for five medical sectors in the NMA, namely, tertiary hospitals (THS), secondary hospitals (SHS), community health centres (CHCS), township hospitals (TsHS) and professional public health institutions (PPHIS). This research combines complex systems theory with a multilevel structural dynamic factor model, and yields two main results. First, although the trend for the NMA's global factor is increasing, the evolutionary paths for sectoral factors differ substantially. Among the sectoral factors, the sectoral factor of THS continued to decline, and neither the sectoral factor of CHCS nor the sectoral factor of TsHS has significantly improved. Then, the interaction mechanism between the various NMA sectors is investigated. While a close relationship has been formed between THS and CHCS and between SHS and CHCS, there remains no close two-way relationship between either THS and TsHS or THS and SHS. Thus, going forward, to reach the policy expectations, China's NMA implementation must consider the interaction between different constituent sectors.

The Hidden Pandemic: the Cost of Postoperative Complications

Purpose of Review

Population-based increases in ageing and medical co-morbidities are expected to substantially increase the incidence of expensive postoperative complications. This threatens the sustainability of essential surgical care, with negative impacts on patients' health and wellbeing.

Recent Findings

Identification of key high-risk areas, and implementation of proven cost-effective strategies to manage both outcome and cost across the end-to-end journey of the surgical episode of care, is clearly feasible. However, good programme design and formal cost-effectiveness analysis is critical to identify, and implement, true high value change.

Summary

Both outcome and cost need to be a high priority for both fundholders and clinicians in perioperative care, with the focus for both groups on delivering high-quality care, which in itself, is the key to good cost management.

Quality of Care Before and After Mergers and Acquisitions of Rural Hospitals

IMPORTANCE

Rural hospitals are increasingly merging with other hospitals. The associations of hospital mergers with quality of care need further investigation.

OBJECTIVES

To examine changes in quality of care for patients at rural hospitals that merged compared with those that remained independent.

DESIGN, SETTING, AND PARTICIPANTS

In this case-control study, mergers at community nonrehabilitation hospitals in Federal Office of Rural Health Policy-eligible zip codes during 2009 to 2016 in 32 states were identified from Irving Levin Associates and the American Hospital Association Annual Survey. Outcomes for inpatient stays for select conditions and elective procedures were derived from the Healthcare Cost and Utilization Project State Inpatient Databases. Difference-in-differences linear probability models were used to assess premerger to postmerger changes in outcomes for patients discharged from merged vs comparison hospitals that remained independent. Data were analyzed from February to December 2020.

EXPOSURES

Hospital mergers.

MAIN OUTCOMES AND MEASURES

The main outcome was in-hospital mortality among patients admitted for acute myocardial infarction (AMI), heart failure, stroke, gastrointestinal hemorrhage, hip fracture, or pneumonia, as well as complications during stays for elective surgeries.

RESULTS

A total of 172 merged hospitals and 266 comparison hospitals were analyzed. After matching, baseline patient characteristics were similar for 303 747 medical stays and 175 970 surgical stays at merged hospitals and 461 092 medical stays and 278 070 surgical stays at comparison hospitals. In-hospital mortality among AMI stays decreased from premerger to postmerger at merged hospitals (9.4% to 5.0%) and comparison hospitals (7.9% to 6.3%). Adjusting for patient, hospital, and community characteristics, the decrease in in-hospital mortality among AMI stays 1 year postmerger was 1.755 (95% CI, -2.825 to -0.685) percentage points greater at merged hospitals than at comparison hospitals (P < .001). This finding held up to 4 years postmerger (DID, -2.039 [95% CI, -3.388 to -0.691] percentage points; P = .003). Greater premerger to postmerger decreases in mortality at merged vs comparison hospitals were also observed at 5 years postmerger among stays for heart failure (DID, -0.756 [95% CI, -1.448 to -0.064] percentage points; P = .03), stroke (DID, -1.667 [95% CI, -3.050 to -0.283] percentage points; P = .02), and pneumonia (DID, -0.862 [95% CI, -1.681 to -0.042] percentage points; P = .04).

CONCLUSIONS AND RELEVANCE

These findings suggest that rural hospital mergers were associated with better mortality outcomes for AMI and several other conditions. This finding is important to enhancing rural health care and reducing urban-rural disparities in quality of care.

Does price deregulation in a competitive hospital market damage quality?

Regulators may be hesitant to permit price competition in healthcare markets because of its potential to damage quality. We assess whether this fear is well founded by examining a reform that permitted Dutch health insurers to freely negotiate prices with hospitals. Unlike previous research on hospital competition that has relied on quality indicators for urgent treatments, we take advantage of a plausible absence of selection bias to identify the effect on the quality of elective procedures that should be more price responsive. Using data on all admissions for hip replacements to Dutch hospitals and a difference-in-differences comparison between more and less concentrated markets, we find no evidence that price deregulation in a competitive environment reduces quality measured by hip replacement readmission rates.

Is there a volume-quality relationship within the independent treatment centre sector? A longitudinal analysis

BACKGROUND

The number of independent treatment centres (ITCs) has grown substantially. However, little is known as to whether the volume-quality relationship exists within this sector and whether other possible organisational factors mediate this relationship. The aim of this study is to gain a better understanding of such possible relationships.

METHODS

Data originate from the Dutch Health and Youth Care Inspectorate (IGJ) and the Dutch Patients Association. We used longitudinal data from 4 years (2014-2017) including three different quality measures: 1) composite of structural and process indicators, 2) postoperative infections, and 3) patient satisfaction. We measured volume by the number of invasive treatments. We adjusted for three important organisational characteristics: (1) size of workforce, (2) chain membership, and (3) ownership status. For statistical inference, random effects analysis was used. We also ran several robustness checks for the volume-quality relationship, including a fractional logit model.

RESULTS

ITCs with higher volumes scored better on structure, process and outcome (i.e. postoperative infections) indicators compared to the low-volume ITCs - although only marginally on outcome. However, ITCs with higher volumes do not have higher patient satisfaction. There is a decreasing marginal effect of volume - in other words, an L-shaped curve. The effect of the intermediating structural factors on the volume-quality relationship (i.e. workforce size, chain membership and ownership status) is less clear. Our findings suggest that chain membership has a negative influence on patient satisfaction. Furthermore, for-profit providers scored better on the Net Promoter Score.

CONCLUSIONS

Our study shows with some certainty that the quality of care in low-volume ITCs is lower than in high-volume ITCs as measured by structural, process and outcome (i.e. postoperative infection) indicators. However, the size of the effect of volume on postoperative infections is small, and at higher volumes the marginal benefits (in terms of lower postoperative infections) decrease. In addition, volume is not related to patient satisfaction. Furthermore, the association between the structural intermediating factors and quality are tenuous.

The relationship between hospital adoption and use of high technology medical imaging and in-patient mortality and length of stay

PURPOSE

The purpose of this paper is to investigate the relationship between hospital adoption and use of computed tomography (CT) scanners, and magnetic resonance imaging (MRI) machines and in-patient mortality and length of stay.

DESIGN/METHODOLOGY/APPROACH

This study used panel data (2007-2010) from 124 hospital corporations operating in Ontario, Canada. Imaging use focused on medical patients accounting for 25 percent of hospital discharges. Main outcomes were in-hospital mortality rates and average length of stay. A model for each outcome-technology combination was built, and controlled for hospital structural characteristics, market factors and patient characteristics.

FINDINGS

In 2010, 36 and 59 percent of hospitals had adopted MRI machines and CT scanners, respectively. Approximately 23.5 percent of patients received CT scans and 3.5 percent received MRI scans during the study period. Adoption of these technologies was associated with reductions of up to 1.1 percent in mortality rates and up to 4.5 percent in length of stay. The imaging use-mortality relationship was non-linear and varied by technology penetration within hospitals. For CT, imaging use reduced mortality until use reached 19 percent in hospitals with one scanner and 28 percent in hospitals with 2+ scanners. For MRI, imaging use was largely associated with decreased mortality. The use of CT scanners also increased length of stay linearly regardless of technology penetration (4.6 percent for every 10 percent increase in use). Adoption and use of MRI was not associated with length of stay.

RESEARCH LIMITATIONS/IMPLICATIONS

These results suggest that there may be some unnecessary use of imaging, particularly in small hospitals where imaging is contracted out. In larger hospitals, the results highlight the need to further investigate the use of imaging beyond certain thresholds. Independent of the rate of imaging use, the results also indicate that the presence of CT and MRI devices within a hospital benefits quality and efficiency.

ORIGINALITY/VALUE

To the authors' knowledge, this study is the first to investigate the combined effect of adoption and use of medical imaging on outcomes specific to CT scanners and MRI machines in the context of hospital in-patient care.

Organizing Health Care Networks: Balancing Markets, Government and Civil Society

Much is changing in health care organization today. A perspective or paradigm that is gaining ever increasing momentum is that of translational, extramural and integrated care. Current research suggests many potential benefits for integrated care and health care networks but the ethical issues are less frequently emphasized. Showing that integrated care can be beneficial, does not mean it is automatically ethically justified. We will argue for three ethical requirements such health care networks should meet. Subsequently we will look at the mechanisms driving the formation of networks and examine how these can cause networks to meet or fail to meet these ethical requirements or obligations. The three mechanisms we will examine are government, civil society and market mechanisms, which, we argue, should be balanced properly. Each mechanism is able to provide a relevant ethical perspective to health care networks. However, when the balance is skewed towards a single mechanism, health care networks might fail to promote one or more of the ethical requirements.

Adoption of high technology medical imaging and hospital quality and efficiency: Towards a conceptual framework

Measuring the value of medical imaging is challenging, in part, due to the lack of conceptual frameworks underlying potential mechanisms where value may be assessed. To address this gap, this article proposes a framework that builds on the large body of literature on quality of hospital care and the classic structure-process-outcome paradigm. The framework was also informed by the literature on adoption of technological innovations and introduces 2 distinct though related aspects of imaging technology not previously addressed specifically in the literature on quality of hospital care: adoption (a structural hospital characteristic) and use (an attribute of the process of care). The framework hypothesizes a 2-part causality where adoption is proposed to be a central, linking factor between hospital structural characteristics, market factors, and hospital outcomes (ie, quality and efficiency). The first part indicates that hospital structural characteristics and market factors influence or facilitate the adoption of high technology medical imaging within an institution. The presence of this technology, in turn, is hypothesized to improve the ability of the hospital to deliver high quality and efficient care. The second part describes this ability throughout 3 main mechanisms pointing to the importance of imaging use on patients, to the presence of staff and qualified care providers, and to some elements of organizational capacity capturing an enhanced clinical environment. The framework has the potential to assist empirical investigations of the value of adoption and use of medical imaging, and to advance understanding of the mechanisms that produce quality and efficiency in hospitals.

Hospital Characteristics and the Agency for Healthcare Research and Quality Inpatient Quality Indicators: A Systematic Review

BACKGROUND

The Agency for Healthcare Research and Quality Inpatient Quality Indicators (IQIs) include inpatient mortality for selected procedures and medical conditions. They have assumed an increasingly prominent role in hospital comparisons. Healthcare delivery and policy-related decisions need to be driven by reliable research that shows associations between hospital characteristics and quality of inpatient care delivered.

OBJECTIVES

To systematically review the literature on associations between hospital characteristics and IQIs.

METHODS

We systematically searched PubMed and gray literature (2000-2012) for studies relevant to 14 hospital characteristics and 17 IQIs. We extracted data for study characteristics, IQIs analyzed, and hospital characteristics (e.g., teaching status, bed size, patient volume, rural vs. urban location, and nurse staffing).

RESULTS

We included 16 studies, which showed few significant associations. Four hospital characteristics (higher hospital volume, higher nurse staffing, urban vs. rural status, and higher hospital financial resources) had statistically significant associations with lower mortality and selected IQIs in approximately half of the studies. For example, there were no associations between nurse staffing and four IQIs; however, approximately 50% of studies showed a statistically significant relationship between nurse staffing and lower mortality for six IQIs. For two hospital characteristics-higher bed size and disproportionate share percentage-all statistically significant associations had higher mortality. Five hospital characteristics (teaching status, system affiliation, ownership, minority-serving hospitals, and electronic health record status) had some studies with significantly positive and some with significantly negative associations, and many studies with no association.

CONCLUSIONS

We found few associations between hospital characteristics and mortality IQIs. Differences in study methodology, coding across hospitals, and hospital case-mix adjustment may partly explain these results. Ongoing research will evaluate potential mechanisms for the identified associations.

Competition and quality indicators in the health care sector: empirical evidence from the Dutch hospital sector

There is much debate about the effect of competition in healthcare and especially the effect of competition on the quality of healthcare, although empirical evidence on this subject is mixed. The Netherlands provides an interesting case in this debate. The Dutch system could be characterized as a system involving managed competition and mandatory healthcare insurance. Information about the quality of care provided by hospitals has been publicly available since 2008. In this paper, we evaluate the relationship between quality scores for three diagnosis groups and the market power indicators of hospitals. We estimate the impact of competition on quality in an environment of liberalized pricing. For this research, we used unique price and production data relating to three diagnosis groups (cataract, adenoid and tonsils, bladder tumor) produced by Dutch hospitals in the period 2008-2011. We also used the quality indicators relating to these diagnosis groups. We reveal a negative relationship between market share and quality score for two of the three diagnosis groups studied, meaning that hospitals in competitive markets have better quality scores than those in concentrated markets. We therefore conclude that more competition is associated with higher quality scores.

Why hospitals adopt patient engagement functionalities at different speeds? A moderated trend analysis

OBJECTIVE

To investigate acute care hospitals' adoption speed of patient engagement health information technology (HIT) functionalities from 2008 to 2013 and how this speed is contingent on environmental factors and hospital characteristics.

METHODS

Data on non-government acute care hospitals located in the United States was obtained from merging three databases: the American Hospital Association's (AHA) annual survey information technology supplement, AHA annual survey, and the Area Health Resource File (AHRF). The variables obtained from these datasets were the amount of annually adopted patient engagement HIT functionalities and environmental and organizational characteristics. Environmental factors included were uncertainty, munificence, and complexity. Hospital characteristics included size, system membership, ownership, and teaching status.

RESULTS

A regression analysis of 4176 hospital-year observations revealed a positive trend in the adoption of HIT functionalities for patient engagement (β= 1.109, p < 0.05). Moreover, the study showed that large, system-affiliated, not-for-profit, teaching hospitals adopt patient engagement HIT functionalities at a faster speed than their counterparts. Environmental munificence and uncertainty were also associated with an accelerating speed of adoption. Environmental complexity however did not show a significant impact on the speed of adoption.

DISCUSSION

From 2008 to 2013, there was a significant acceleration in the speed of adopting patient engagement HIT functionalities. Further efforts should be made to ensure proper adoption and consistent use by patients in order to reap the benefits of these IT investments.

CONCLUSION

Hospitals adopted at least one HIT functionality for patient engagement per year. The adoption speed varied across hospitals, depending on both environmental and organizational factors.

Medical costs, Cesarean delivery rates, and length of stay in specialty hospitals vs. non-specialty hospitals in South Korea

Background

Since 2011, specialty hospitals in South Korea have been known for providing high- quality care in specific clinical areas. Much research related to specialty hospitals and their performance in many such areas has been performed, but investigations about their performance in obstetrics and gynecology are lacking. Thus, we aimed to compare specialty vs. non-specialty hospitals with respect to mode of obstetric delivery, especially the costs and length of stay related to Cesarean section (CS) procedures, and to provide evidence to policy-makers for evaluating the success of hospitals that specialize in obstetric and gynecological (OBGYN) care.

Methods

We obtained National Health Insurance claim data from 2012 to 2014, which included information from 418,141 OBGYN cases at 214 hospitals. We used a generalized estimating equation model to identify a potential association between the likelihood of CS at specialty hospitals compared with other hospitals. We also evaluated medical costs and length of stay in specialty hospitals according to type of delivery.

Results

We found that 150,256 (35.9%) total deliveries were performed by CS. The odds ratio of CS was significantly lower in specialty hospitals (OR: 0.95, 95% CI: 0.93–0.96compared to other hospitals Medical costs (0.74%) and length of stay (1%) in CS cases increased in specialty hospitals, although length of stay following vaginal delivery was lower (0.57%) in specialty hospitals compared with other hospitals.

Conclusions

We determined that specialty hospitals are significantly associated with a lower likelihood of CS delivery and shorter length of stay after vaginal delivery. Although they are also associated with higher costs for delivery, the increased cost could be due to the high level of intensive care provided, which leads to improve quality of care. Policy-makers should consider incentive programs to maintain performance of specialty hospitals and promote efficiency that could reduce medical costs accrued by patients.

Does Competition Have an Effect on Price and Quality in Physiotherapy?

We estimate the effect of competition on quality and prices in physiotherapy organised and financed by the Social Insurance Institution of Finland for disabled individuals. Within the physiotherapy market, firms participate in competitive bidding, prices are determined by the market, services are free at the point of use and firms are allowed to react to patient choice only by enhancing quality. Firm-level data (n = 854) regarding quality and price were analysed. Using 2SLS estimation techniques, we analysed the relationship between quality and competition, and price and competition. Our study found that competition has a negative (yet weak) effect on quality. Prices on the other hand are not affected by competition. The result is likely caused by imperfect information, because it seems that the Social Insurance Institution of Finland has provided too little information for patients to make adequate choices about proper service providers. We argue that by publishing quality information, it is possible to ease the decision-making of patients and influence the quality strategies of firms active in the physiotherapy market. Moreover, we found that competition appeared as an exogenous variable in this study. Copyright © 2016 John Wiley & Sons, Ltd.

Hospital Competition, Managed Care, and Mortality after Hospitalization for Medical Conditions: Evidence from Three States

This study assessed the effect of hospital competition and HMO penetration on mortality after hospitalization for six medical conditions in California, New York, and Wisconsin. We used linked hospital-discharge and vital-statistics data to study adults hospitalized for myocardial infarction, hip fracture, stroke, gastrointestinal hemorrhage, congestive heart failure, or diabetes. We estimated logistic regression models with death within 30 days of admission as the dependent variable and hospital competition, HMO penetration, and hospital and patient characteristics as explanatory variables. Higher hospital competition was associated with lower mortality in California and New York but not Wisconsin. Higher HMO penetration was associated with lower mortality in California but higher mortality in New York. These findings suggest that hospitals in highly competitive markets compete on quality even in the absence of mature managed-care markets. The findings also underscore the need to consider geographic effects in studies of market structure and hospital quality.

Research on the Hospital Market: Recent Advances and Continuing Data Needs

Research focused on the hospital market has been instrumental in furthering our understanding of the role of competition in health care. Such research would not have been conducted without the extensive public use data that have been made available to researchers. In particular, path-breaking studies were made possible thanks to access to Medicare and state all-payer discharge data. This paper describes recent advances in our understanding of hospital competition and speculates about what we could learn if additional data were available.

The Association between Medicare Advantage Market Penetration and Diabetes in the United States

The objective of this study is to explore the extent to which managed care market penetration in the United States is associated with the presence of chronic disease. Diabetes was selected as the chronic disease of interest due to its increasing prevalence as well as the disease management protocols that can lessen disease complications. We hypothesized that greater managed care market penetration would be associated with (1) lower prevalence of diabetes and (2) lower prevalence of diabetes-related comorbidities (DRCs) among diabetics. Data for this analysis came from two sources. We merged Medicare Advantage (MA) market penetration data from the Centers for Medicare and Medicaid Services (CMS) with data from the Medical Expenditure Panel Survey (MEPS) (2004-2008). Results suggest that county-level MA market penetration is not significantly associated with prevalence of diabetes or DRCs. That finding is quite interesting in that managed care market penetration has been shown to have an effect on utilization of inpatient services. It may be that managed care protocols do not offer the same benefits beyond the inpatient setting.

Chronic Disease Prevalence and Medicare Advantage Market Penetration: Findings From the Medical Expenditure Panel Survey

By March 2015, 30% of all Medicare beneficiaries were enrolled in Medicare Advantage (MA) plans. Research to date has not explored the impacts of MA market penetration on individual or population health outcomes. The primary objective of this study is to examine the relationships between MA market penetration and the beneficiary's portfolio of cardiometabolic diagnoses. This study uses 2004 to 2008 Medical Expenditure Panel Survey (MEPS) Household Component data to construct an aggregate index that captures multiple diagnoses in one outcome measure (Chronic Disease Severity Index [CDSI]). The MEPS data for 8089 Medicare beneficiaries are merged with MA market penetration data from Centers for Medicare and Medicaid Services (CMS). Ordinary least squares regressions are run with SAS 9.3 to model the effects of MA market penetration on CDSI. The results suggest that each percentage increase in MA market penetration is associated with a greater than 2-point decline in CDSI (lower burden of cardiometabolic chronic disease). Spill-over effects may be driving improvements in the cardiometabolic health of beneficiary populations in counties with elevated levels of MA market penetration.

Compliance with a time-out procedure intended to prevent wrong surgery in hospitals: results of a national patient safety programme in the Netherlands

OBJECTIVE

To prevent wrong surgery, the WHO 'Safe Surgery Checklist' was introduced in 2008. The checklist comprises a time-out procedure (TOP): the final step before the start of the surgical procedure where the patient, surgical procedure and side/site are reviewed by the surgical team. The aim of this study is to evaluate the extent to which hospitals carry out the TOP before anaesthesia in the operating room, whether compliance has changed over time, and to determine factors that are associated with compliance.

DESIGN

Evaluation study involving observations.

SETTING

Operating rooms of 2 academic, 4 teaching and 12 general Dutch hospitals.

PARTICIPANTS

A random selection was made from all adult patients scheduled for elective surgery on the day of the observation, preferably involving different surgeons and different procedures.

RESULTS

Mean compliance with the TOP was 71.3%. Large differences between hospitals were observed. No linear trend was found in compliance during the study period. Compliance at general and teaching hospitals was higher than at academic hospitals. Compliance decreased with the age of the patient, general surgery showed lower compliance in comparison with other specialties and compliance was higher when the team was focused on the TOP.

CONCLUSIONS

Large differences in compliance with the TOP were observed between participating hospitals which can be attributed at least in part to the type of hospital, surgical specialty and patient characteristics. Hospitals do not comply consistently with national guidelines to prevent wrong surgery and further implementation as well as further research into non-compliance is needed.

The Effect of Entry Regulation in the Health Care Sector: the Case of Home Health

The consequences of government regulation in the post-acute care sector are not well understood. We examine the effect of entry regulation on quality of care in home health care by analyzing the universe of hospital discharges during 2006 for publicly insured beneficiaries (about 4.5 million) and subsequent home health admissions to determine whether there is a significant difference in home health utilization, hospital readmission rates, and health care expenditures in states with and without Certificate of Need laws (CON) regulating entry. We identify these effects by looking across regulated and nonregulated states within Hospital Referral Regions, which characterize well-defined health care markets and frequently cross state boundaries. We find that CON states use home health less frequently, but system-wide rehospitalization rates, overall Medicare expenditures, and home health practice patterns are similar. Removing CON for home health would have negligible system-wide effects on health care costs and quality.

Market competition, ownership, payment systems and the performance of health care providers - a panel study among Finnish occupational health services providers

Many health care reforms rely on competition although health care differs in many respects from the assumptions of perfect competition. Finnish occupational health services provide an opportunity to study empirically competition, ownership and payment systems and the performance of providers. In these markets employers (purchasers) choose the provider and prices are market determined. The price regulation of public providers was abolished in 1995. We had data on providers from 1992, 1995, 1997, 2000 and 2004. The unbalanced panel consisted of 1145 providers and 4059 observations. Our results show that in more competitive markets providers in general offered a higher share of medical care compared to preventive services. The association between unit prices and revenues and market environment varied according to the provider type. For-profit providers had lower prices and revenues in markets with numerous providers. The public providers in more competitive regions were more sensitive to react to the abolishment of their price regulation by raising their prices. Employer governed providers had weaker association between unit prices or revenues and competition. The market share of for-profit providers was negatively associated with productivity, which was the only sign of market spillovers we found in our study.

Effects of regulated competition on key outcomes of care: cataract surgeries in the Netherlands

Similar to several other countries, the Netherlands implemented market-oriented health care reforms in recent years. Previous studies raised questions on the effects of these reforms on key outcomes such as quality, costs, and prices. The empirical evidence is up to now mixed. This study looked at the variation in prices, volume, and quality of cataract surgeries since the introduction of price competition in 2006. We found no price convergence over time and constant price differences between hospitals. Quality indicators generally showed positive results in cataract care, though the quality and scope of the indicators was suboptimal at this stage. Furthermore, we found limited between-hospital variation in quality and there was no clear-cut relation between prices and quality. Volume of cataract care strongly increased in the period studied. These findings indicate that health insurers may not have been able to drive prices down, make trade-offs between price and quality, and selectively contract health care without usable quality information. Positive results coming out from the 2006 reform should not be taken for granted. Looking forward, future research on similar topics and with newer data should clarify the extent to which these findings can be generalized.

Effects of competition on hospital quality: an examination using hospital administrative data

This paper investigates the effects of competition on hospital quality using hospital administration data from the State of Victoria, Australia. Hospital quality is measured by 30-day mortality rates and 30-day unplanned readmission rates. Competition is measured by Herfindahl-Hirschman index and the numbers of competing public and private hospitals. The paper finds that hospitals facing higher competition have lower unplanned admission rates. However, competition is related negatively to hospital quality when measured by mortality, albeit the effects are weak and barely statistically significant. The paper also finds that the positive effect of competition on quality as measured by unplanned readmission differs greatly depending on whether the hospital is publicly or privately owned.

Can competition improve outcomes in UK health care? Lessons from the past two decades

UK governments of all political colours have sought to improve productivity in health care by introducing pro-competitive reforms in the National Health Service (NHS) during the last two decades. The first wave of reform operated from 1991 to 1997. The second wave was introduced in England only in the mid 2000s. In 2010, further reform in England, intended to increase the extent of competition, was proposed by the Coalition administration. But the effect of competition on productivity in health care and in particular on the quality of health care remains a contested issue. This paper reviews the evidence, focusing on robust and recent evidence, on the use of competition as a mechanism for improving quality. The consensus is that competition will increase quality in health care, but that institutional details matter. Given this, we end by discussing whether the current plans to make the buyers of care family doctors and other professionals and to allow some local price variation are likely to be beneficial in the UK context of full public funding for health care.

Moving towards culturally competent health systems: organizational and market factors

Cultural competency has been proposed as an organizational strategy to address racial/ethnic disparities in the healthcare system; disparities are a long-standing policy challenge whose relevance is only increasing with the increasing population diversity of the US and across the world. Using an integrative conceptual framework based on the resource dependency and institutional theories, we examine the relationship between organizational and market factors and hospitals' degree of cultural competency. Our sample consists of 119 hospitals located in the state of California (US) and is constructed using the following datasets for the year 2006: Cultural Competency Assessment Tool of Hospitals (CCATH) Survey, California's Office of Statewide Health Planning & Development's Hospital Inpatient Discharges and Annual Hospital Financial Data, American Hospital Association's Annual Survey, and the Area Resource File. The dependent variable consists of the degree of hospital cultural competency, as assessed by the CCATH overall score. Organizational variables include ownership status, teaching hospital, payer mix, size, system membership, financial performance, and the proportion of inpatient racial/ethnic minorities. Market characteristics included hospital competition, the proportion of racial/ethnic minorities in the area, metropolitan area, and per capita income. Regression analyses were conducted to assess the relationship between the CCATH overall score and organizational and market variables. Our results show that hospitals which are not-for-profit, serve a more diverse inpatient population, and are located in more competitive and affluent markets exhibit a higher degree of cultural competency. Our results underscore the importance of both institutional and competitive market pressures in guiding hospital behavior. For instance, while not-for-profit may adopt innovative/progressive policies like cultural competency simply as a function of their organizational goals, linking cultural competency with organizational performance may be essential to attract more profit driven hospitals.

The impact of hospital mergers on treatment intensity and health outcomes

OBJECTIVE

To analyze the impact of hospital mergers on treatment intensity and health outcomes.

DATA

Hospital inpatient data from California for 1990 through 2006, encompassing 40 mergers.

STUDY DESIGN

I used a geographic-based IV approach to determine the effect of a zip code's exposure to a merger. The merged facility's market share represents exposure, instrumented with combined premerge shares. Additional specifications include Herfindahl Index (HHI), instrumented with predicted change in HHI.

RESULTS

The primary specification results indicate that merger completion is associated with a 3.7 percent increase in the utilization of bypass surgery and angioplasty and a 1.7 percent increase in inpatient mortality above averages in 2000 for the average zip code. Isolating the competition mechanism mutes the treatment intensity result slightly, but it more than doubles the merger exposure effect on inpatient mortality to a 3.9 percent increase. The competition mechanism is associated with a sizeable increase in number of procedures.

CONCLUSIONS

Unlike previous studies, this analysis finds that hospital mergers are associated with increased treatment intensity and higher inpatient mortality rates among heart disease patients. Access to additional outcome measures such as 30-day mortality and readmission rates might shed additional light on whether the relationship between these outcomes is causal.

Does Hospital Competition Save Lives? Evidence from the English NHS Patient Choice Reforms

Recent substantive reforms to the English National Health Service expanded patient choice and encouraged hospitals to compete within a market with fixed prices. This study investigates whether these reforms led to improvements in hospital quality. We use a difference-in-difference-style estimator to test whether hospital quality (measured using mortality from acute myocardial infarction) improved more quickly in more competitive markets after these reforms came into force in 2006. We find that after the reforms were implemented, mortality fell (i.e. quality improved) for patients living in more competitive markets. Our results suggest that hospital competition can lead to improvements in hospital quality.

Adverse event rates as measures of hospital performance

OBJECTIVES

Adverse event or complication rates are increasingly advocated as measures of hospital quality and performance. Objective of this study is to analyse patient-complexity adjusted adverse events rates to compare the performance of hospitals in Victoria, Australia. We use a unique hospital dataset that routinely records adverse events which arise during the admission. We identify hospitals with below or above average performance in comparison to their peers, and show for which types of hospitals risk adjusting makes biggest difference.

METHODS

We estimate adverse event rates for 87,790 elective and 43,771 emergency episodes in 34 public hospitals over the financial year 2005/06 with a complementary log-log model, using patient level administrative hospital data and controlling for patient complexity with a range of covariates.

RESULTS

Teaching hospitals have average risk-adjusted adverse event rates of 24.3% for elective and 19.7% for emergency surgical patients. Suburban and rural hospitals have lower rates of 17.4% and 17%, and 16.1% and 15.7%, respectively. Selected non-teaching hospitals have relatively high rates, in particular hospitals in rural and socially disadvantaged areas. Risk adjustment makes a significant difference to most hospitals.

CONCLUSION

We find comparably high adverse events rates for surgical patients in Australian hospitals, possibly because our data allow identification of a larger number of adverse events than data used in previous studies. There are marked variations in adverse event rates across hospitals in Victoria, even after risk adjusting. We discuss how policy makers could improve quality of care in Australian hospitals.

Comparing patient outcomes across payer types: implications for using hospital discharge records to assess quality

OBJECTIVE

To explain observed differences in patient outcomes across payer types using hospital discharge records. Specifically, we address two mechanisms: hospital-payer matching versus unobserved patient heterogeneity.

DATA SOURCE

Florida's hospital discharge records (1996-2000) of major surgery patients with private health insurance between the ages of 18 and 65, Health Maintenance Organization (HMO) market penetration data, hospital systems data, and the Area Resource File.

STUDY DESIGN

The dependent variable is occurrence of one or more in-hospital complications as identified by the Complication Screening Program. The key independent variable is patients' primary-payer type (HMO, Preferred Provider Organization, and fee-for-service). We estimate five different logistic regression models, each representing a different assumption about the underlying factors that confound the causal relationship between the payer type and the likelihood of experiencing complications.

PRINCIPAL FINDING

We find that the observed differences in complication rates across payer types are largely driven by unobserved differences in patient health, even after adjusting for case mix using available data elements in the discharge records.

CONCLUSION

Because of the limitations inherent to hospital discharge records, making quality comparisons in terms of patient outcomes is challenging. As such, any efforts to assess quality in such a manner must be carried out cautiously.

The impact of universal National Health Insurance on population health: the experience of Taiwan

Background

Taiwan established a system of universal National Health Insurance (NHI) in March, 1995. Today, the NHI covers more than 98% of Taiwan's population and enrollees enjoy almost free access to healthcare with small co-payment by most clinics and hospitals. Yet while this expansion of coverage will almost inevitably have improved access to health care, however, it cannot be assumed that it will necessarily have improved the health of the population. The aim of this study was to determine whether the introduction of National Health Insurance (NHI) in Taiwan in 1995 was associated with a change in deaths from causes amenable to health care.

Methods

Identification of discontinuities in trends in mortality considered amenable to health care and all other conditions (non-amenable mortality) using joinpoint regression analysis from 1981 to 2005.

Results

Deaths from amenable causes declined between 1981 and 1993 but slowed between 1993 and 1996. Once NHI was implemented, the decline accelerated significantly, falling at 5.83% per year between 1996 and 1999. In contrast, there was little change in non-amenable causes (0.64% per year between 1981 and 1999). The effect of NHI was highest among the young and old, and lowest among those of working age, consistent with changes in the pattern of coverage. NHI was associated with substantial reductions in deaths from circulatory disorders and, for men, infections, whilst an earlier upward trend in female cancer deaths was reversed.

Conclusions

NHI was associated in a reduction in deaths considered amenable to health care; particularly among those age groups least likely to have been insured previously.

Hospital competition and patient-perceived quality of care: Evidence from a single-payer system in Taiwan

OBJECTIVES

To examine the effects of market competition on patient-perceived quality of care under a single-payer system in Taiwan.

METHODS

Data came from two nationwide surveys conducted on discharged patients and National Health Insurance (NHI) hospital claim datasets in 2002 and 2004. Competition was measured by the Herfindahl-Hirschman Index (HHI). Quality of care was measured by patient-rated hospital performance including interpersonal skills and clinical competence domains. We used the instrumental variable approach to address the endogeneity between competition and patient-perceived quality of care.

RESULTS

The results showed that HHI was significantly associated with a decrease in the perceived interpersonal skills (coefficient of -0.460; p<0.001), indicating that the interpersonal skill level increases in competition. A similar association was found for the perceived clinical competence (coefficient of -0.457; p=0.001).

CONCLUSION

Quality of care from the patients' perspective is sensitive to the degree of competition. By using patient-reported data, this study provides new evidence concerning competition and quality of care.

Quality information and fragmented markets: patient responses to hospital volume thresholds

Over the last two decades, information dissemination policies to improve patient hospital choice have emerged. But during this same period, policy makers have also generally adopted a market-oriented approach vis-à-vis hospitals, with limited regulation of facility expansion and few restrictions on hospital mergers and ownership changes. These policies may be in tension, and this analysis examines whether there have been changes over time in patient responses to information about the value of high-volume hospitals and the degree to which hospital market changes may have limited these patient responses. The results indicate modest changes consistent with an increase in quality-seeking behavior for several services for which research indicates a volume-outcome relationship. At the same time, there are services for which trends have been moving in the opposite direction--toward greater local-care seeking--and changes for the remaining services have been fairly small. Even for services with a trend toward greater patient sensitivity to volume as a marker for quality, however, hospital market changes have reduced the change over time in high-volume hospital use. These results highlight some of the limitations of market-oriented strategies for increasing patient use of high-quality hospitals.

The Effects of Hospital Competition on Inpatient Quality of Care

Existing empirical studies have produced inconclusive, and sometimes contradictory, findings on the effects of hospital competition on inpatient quality of care. These inconsistencies may be due to the use of different methodologies, hospital competition measures, and hospital quality measures. This paper applies the Quality Indicator software from the Agency for Healthcare Research and Quality to the 1997 Healthcare Cost and Utilization Project State Inpatient Databases to create three versions (i.e., observed, risk-adjusted, and “smoothed”) of 38 distinct measures of inpatient quality. The relationship between 12 different hospital competition measures and these quality measures are assessed, using ordinary least squares, two-step efficient generalized method of moments, and negative binomial regression techniques. We find that across estimation strategies, hospital competition has an impact on a number of hospital quality measures. However, the effect is not unidirectional: some indicators show improvements in hospital quality with greater levels of competition, some show decreases in hospital quality, and others are unaffected. We provide hypotheses based on emerging areas of research that could explain these findings, but inconsistencies remain.

Hospital Staffing Decisions: Does Financial Performance Matter?

This study assesses the impact of changes in hospitals' financial conditions on changes in hospitals' staffing decisions. The sample consisted of community hospitals operating between 1995 and 2000. The analysis employed a generalized method of moments (GMM) estimator for its dynamic panel data. Cash flow and patient margin were used to measure financial condition. We estimated the effect of changing financial condition on the number of full-time equivalent personnel (FTEs), registered nurses (RNs), and licensed practical nurses (LPNs) per 1,000 adjusted patient days. Our results suggest that declining financial performance led to cutbacks in LPN FTEs per adjusted patient day, but the effects on total hospital FTEs and RN FTEs were mixed.

Hospital financial condition and the quality of patient care

Concerns about deficiencies in the quality of care delivered in US hospitals grew during a time period when an increasing number of hospitals were experiencing financial problems. Our study examines a six-year longitudinal database of general acute care hospitals in 11 states to assess the relationship between hospital financial condition and quality of care. We evaluate two measures of financial performance: operating margin and a broader profitability measure that encompasses both operating and non-operating sources of income. Our model specification allows for gradual adjustments in quality-enhancing activities and recognizes that current realizations of patient quality may affect future financial performance. Empirical results suggest that there is a relationship between financial performance and quality of care, but not as strong as suggested in earlier research. Overall, our results suggest that deep financial problems that go beyond the patient care side of business may be important to prompting quality problems.

Control and performance of health care systems. A comparative analysis of 19 OECD countries

This paper performs an empirical comparison of health systems. Health systems are seen as networks of delegation relationships among principals and agents, subject to agency problems. Following the institutional economics approach, a health system's efficiency is considered to be determined by the existence and treatment of agency problems. Agency problems can be controlled by mechanisms built into the health system, or can also be controlled by an external actor, for example, the government, either by using the instruments available or by conducting institutional reforms. To explain differences in the amenability of a country's health system to external governmental control, I combine the veto player approach and the incentives for societal actors to exert influence, into the concept of indirect veto players: the more indirect veto players exist, the less external control will be exercised.I derive indicators capturing both forms of control and perform a comparison of health systems based on institutional and performance data. Using data reducing methods, I identify two dimensions of control underlying the institutional setting of the health system and three dimensions of health system performance. The relationships found between control and performance confirm the hypotheses derived from the adopted theoretical approach.

Incorporating health care quality into health antitrust law

Background

Antitrust authorities treat price as a proxy for hospital quality since health care quality is difficult to observe. As the ability to measure quality improved, more research became necessary to investigate the relationship between hospital market power and patient outcomes. This paper examines the impact of hospital competition on the quality of care as measured by the risk-adjusted mortality rates with the hospital as the unit of analysis. The study separately examines the effect of competition on non-profit hospitals.

Methods

We use California Office of Statewide Health Planning and Development (OSHPD) data from 1997 through 2002. Empirical model is a cross-sectional study of 373 hospitals. Regression analysis is used to estimate the relationship between Coronary Artery Bypass Graft (CABG) risk-adjusted mortality rates and hospital competition.

Results

Regression results show lower risk-adjusted mortality rates in the presence of a more competitive environment. This result holds for all alternative hospital market definitions. Non-profit hospitals do not have better patient outcomes than investor-owned hospitals. However, they tend to provide better quality in less competitive environments. CABG volume did not have a significant effect on patient outcomes.

Conclusion

Quality should be incorporated into the antitrust analysis. When mergers lead to higher prices and lower quality, thus lower social welfare, the antitrust challenge of hospital mergers is warranted. The impact of lower hospital competition on quality of care delivered by non-profit hospitals is ambiguous.

Hospital financial condition and operational decisions related to the quality of hospital care

Financial pressure mounted for hospitals nationwide during the late 1990s. Our study examines how this affected the quality of their operations in terms of organizational infrastructure and processes that support the delivery of care. Our sample consisted of community hospitals operating between 1995 and 2000. Financial pressure was measured based on changes in net patient revenues per adjusted patient day and the ratio of cash flow to total revenues. The authors examined effects on hospital investments in plant and equipment and on hospital standards compliance with selected Joint Commission on Accreditation of Healthcare Organization performance areas. The results suggest that increasing financial pressures did lead to cutbacks in these areas. These findings suggest the importance of looking broadly across hospital operations to identify factors that may contribute to poor patient outcomes. Given the findings of earlier studies, these results suggest that poor outcomes may in part result from deterioration in supporting infrastructure and organizational processes.

Hospital competition, managed care, and mortality after hospitalization for medical conditions in California

OBJECTIVE

To assess the effect of hospital competition and health maintenance organization (HMO) penetration on mortality after hospitalization for six medical conditions in California.

DATA SOURCE

Linked hospital discharge and vital statistics data for short-term general hospitals in California in the period 1994-1999. The study sample included adult patients hospitalized for one of the following conditions: acute myocardial infarction (N=227,446), hip fracture (N=129,944), stroke (N=237,248), gastrointestinal hemorrhage (GIH, N=216,443), congestive heart failure (CHF, N=355,613), and diabetes (N=154,837).

STUDY DESIGN

The outcome variable was 30-day mortality. We estimated multivariate logistic regression models for each study condition with hospital competition, HMO penetration, hospital characteristics, and patient severity measures as explanatory variables.

PRINCIPAL FINDINGS

Higher hospital competition was associated with lower 30-day mortality for three to five of the six study conditions, depending on the choice of competition measure, and this finding was robust to a variety of sensitivity analyses. Higher HMO penetration was associated with lower mortality for GIH and CHF.

CONCLUSIONS

Hospitals that faced more competition and hospitals in market areas with higher HMO penetration provided higher quality of care for adult patients with medical conditions in California. Studies using linked hospital discharge and vital statistics data from other states should be conducted to determine whether these findings are generalizable.

Does the Patient's Payer Matter in Hospital Patient Safety?

BACKGROUND

Previous studies have documented that hospitals decrease costs in response to reimbursement cutbacks. However, research concerning how this may affect quality of care has produced mixed results. Until recently, the ability to study changes in patient safety and payment has been limited.

OBJECTIVE

The objective of the study was to determine whether changes in 4 hospital patient safety indicator (PSI) rates are related to changes in the generosity of payers over time.

DATA AND METHODS

Study data are drawn from 1995-2000 hospital discharges in 11 states in the Agency for Healthcare Research and Quality Healthcare Cost and Utilization Project State Inpatient Database. Following the same organizations over time, we estimate hospital fixed-effects regression models of the association of payer-specific time and post Balanced Budget Act (BBA) payment changes with risk-adjusted hospital PSI rates controlling for patient, organizational, and market characteristics. Four PSIs relevant to a large number of patients and hospitals that reflect general care processes are studied.

RESULTS

The time trend during 1995-2000 is consistently significantly positive for private and Medicare hospital PSI rates. Thus, after controlling for patient characteristics and organizational and market factors, performance worsened. The trend is less consistent for Medicaid and does not exist for self-pay hospital PSI rates. After adjusting for multiple comparisons, we also find that the Medicare trend is fairly consistently higher than that of the other payers. In contrast, there is a less consistent BBA effect, especially for Medicare.

Sustaining and Improving Hospital Performance

Using data from hospitals in ten states, this study examines the effects of organizational and market factors on the likelihood of becoming high-quality/low-cost providers during the period of 1997-2001. The findings highlight the important role of previous performance, internal operations, and market competition in hospital performance improvement. Achieving high-quality/low-cost performance is also incidentally found to be associated with improved profit margins.

The effects of price competition and reduced subsidies for uncompensated care on hospital mortality

OBJECTIVE

To determine whether hospital mortality rates changed in New Jersey after implementation of a law that changed hospital payment from a regulated system based on hospital cost to price competition with reduced subsidies for uncompensated care and whether changes in mortality rates were affected by hospital market conditions.

DATA SOURCES/STUDY SETTING

State discharge data for New Jersey and New York from 1990 to 1996. Study Design. We used an interrupted time series design to compare risk-adjusted in-hospital mortality rates between states over time. We compared the effect sizes in markets with different levels of health maintenance organization penetration and hospital market concentration and tested the sensitivity of our results to different approaches to defining hospital markets.

DATA COLLECTION/EXTRACTION METHODS

The study sample included all patients under age 65 admitted to New Jersey or New York hospitals with stroke, hip fracture, pneumonia, pulmonary embolism, congestive heart failure, hip fracture, or acute myocardial infarction (AMI).

PRINCIPAL FINDINGS

Mortality among patients in New Jersey improved less than in New York by 0.4 percentage points among the insured (p=.07) and 0.5 percentage points among the uninsured (p=.37). There was a relative increase in mortality for patients with AMI, congestive heart failure, and stroke, especially for uninsured patients with these conditions, but not for patients with the other four conditions we studied. Less competitive hospital markets were significantly associated with a relative decrease in mortality among insured patients.

CONCLUSIONS

Market-based reforms may adversely affect mortality for some conditions but it appears the effects are not universal. Insured patients in less competitive markets fared better in the transition to price competition.