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

Does hospital competition improve the quality of outpatient care? - empirical evidence from a quasi-experiment in a Chinese city

BACKGROUND

Although countries worldwide have launched a series of pro-competition reforms, the literature on the impacts of hospital competition has produced a complex and contradictory picture. This study examined whether hospital competition contributed to an increase in the quality of outpatient care.

METHODS

The dataset comprises encounter data on 406,664 outpatients with influenza between 2015 and 2019 in China. Competition was measured using the Herfindahl-Hirschman index (HHI). Whether patients had 14-day follow-up encounter for influenza at any healthcare facility, outpatient facility, and hospital outpatient department were the three quality outcomes assessed. Binary regression models with crossed random intercepts were constructed to estimate the impacts of the HHI on the quality of outpatient care. The intensity of nighttime lights was employed as an instrumental variable to address the endogenous relationship between the HHI and the quality of outpatient care.

RESULTS

We demonstrated that an increase in the degree of hospital competition was associated with improved quality of outpatient care. For each 1% increase in the degree of hospital competition, an individual's risk of having a 14-day follow-up encounter for influenza at any healthcare facility, outpatient facility, and hospital outpatient department fell by 34.9%, 18.3%, and 20.8%, respectively. The impacts of hospital competition on improving the quality of outpatient care were more substantial among females, individuals who used the Urban and Rural Residents Basic Medical Insurance to pay for their medical costs, individuals who visited accredited hospitals, and adults aged 25 to 64 years when compared with their counterparts.

CONCLUSION

This study demonstrated that hospital competition contributed to better quality of outpatient care under a regime with a regulated ceiling price. Competition is suggested to be promoted in the outpatient care market where hospitals have control over quality and government sets a limit on the prices that hospitals may charge.

Hospital competition and health outcomes: Evidence from acute myocardial infarction admissions in Germany

Countries increasingly rely on competition among hospitals to improve health outcomes. However, there is limited empirical evidence on the effect of competition on health outcomes in Germany. We examined the effect of hospital competition on quality of care, which is assessed using health outcomes (risk-adjusted in-hospital and post-hospitalization mortality and cardiac-related readmissions), focusing on acute myocardial infarction (AMI) treatment. We obtained data on all hospital utilizations and mortality of 13.2% of the population from a large statutory health insurer and all AMI admission records from Diagnosis-Related Groups Statistic from 2015-19. We constructed the measures of hospital competition, which mitigates the possibility of endogeneity bias. The relationships between health outcomes and competition measures are estimated using linear probability models. Intense competition was associated with lower quality of care in terms of mortality and cardiac-related readmissions. Patients treated in hospitals facing high competition were 0.9 (1.2) percentage points more likely to die within 90 days (2 years) of admission, and 1.4 (1.6) percentage points more likely to be readmitted within 90 days (2 years) of discharge than patients treated in hospitals facing low competition. Our results indicate that hospital competition does not lead to better health outcomes for AMI patients in Germany. Therefore, additional measures are necessary to achieve quality improvement.

Impact of interhospital competition on mortality of patients operated on for colorectal cancer faced to hospital volume and rurality: A cross-sectional study

INTRODUCTION

Contradictions remain on the impact of interhospital competition on the quality of care, mainly the mortality. The aim of the study is to evaluate the impact of interhospital competition on postoperative mortality after surgery for colorectal cancer in France.

METHODS

We conducted a retrospective cross-sectional study from 2015 to 2019. Data were collected from a National Health Database. Patients operated on for colorectal cancer in a hospital in mainland France were included. Competition was measured using number of competitors by distance-based approach. A mixed-effect model was carried out to test the link between competition and mortality.

RESULTS

Ninety-five percent (n = 152,235) of the 160,909 people operated on for colorectal cancer were included in our study. The mean age of patients was 70.4 ±12.2 years old, and female were more represented (55%). A total of 726 hospitals met the criteria for inclusion in our study. Mortality at 30 days was 3.6% and we found that the mortality decreases with increasing of the hospital activity. Using the number of competitors per distance method, our study showed that a "highly competitive" and "moderately competitive" markets decreased mortality by 31% [OR: 0.69 (0.59, 0.80); p<0.001] and by 12% respectively [OR: 0.88 (0.79, 0.99); p<0.03], compared to the "non-competitive" market. High hospital volume (100> per year) was also associated to lower mortality rate [OR: 0.74 (0.63, 0.86); p<0.001].

CONCLUSIONS

The results of our studies show that increasing hospital competition independently decreases the 30-day mortality rate after colorectal cancer surgery. Hospital caseload, patients' characteristics and age also impact the post-operative mortality.

Hospital Competition and Unplanned Readmission: Evidence from a Systematic Review

Competition has been widely introduced among hospitals in the hope of improving health-care quality. However, whether competition leads to higher-quality health care is a topic of considerable debate. We conducted a systematic review to assess the impact of hospital-market competition on unplanned readmission. We searched six electronic databases (PubMed, EmBase, Wiley Online Library, Web of Science, Scopus, and JSTOR) and reference lists of screened articles for relevant studies, and strictly followed methods proposed by the Cochrane Collaboration. Finally, nine observational studies with 2,241,767 patients were included. For the primary outcome, pooled results of three studies showed that it was uncertain whether or not hospital competition reduces readmission (β=0.02, P=0.06; very low certainty of evidence, as they were all observational studies with high heterogeneity). Inconsistent results were found in the remaining six studies, and they were assessed as very low–certainty evidence, downgraded for either inconsistency or indirectness or both. As for secondary outcomes, seven of the nine studies reported on the impact of competition on the risk of mortality, and two reported on length of stay (LOS). It was uncertain whether competition had an effect on mortality or LOS. The relevant studies were limited and of very low certainty, which means there is currently no reliable evidence showing that hospital competition reduces quality of health care in terms of readmission/mortality/LOS. There is a need for rigorous studies to assess the impact of hospital competition on the quality of health care.

The Evolving Hospital Market in China After the 2009 Healthcare Reform

Since the initiation of national healthcare reform in 2009, China’s hospital market has witnessed significant change. To provide a brief description about its evolving process, China Health Statistical Yearbook data and Sichuan administrative data from 2009 to 2017 were used in this article. An overall upward trend of hospital delivery capacity was found in this study, which increased from 3.12 million beds and 1.09 million doctors in 2009 to 6.12 million and 1.80 million in 2017, respectively, while the primary healthcare institutions presented fairly slow development pace. Growing proportion of medical resources and patients gathered in hospitals, especially tertiary hospitals. While private hospitals demonstrated an increasingly important role in hospital market with growing share of capacity and service, their average capacity, especially the human resource, was found to be much lower than that of public hospitals and the gaps are still widening. The competition among hospitals grouped by homogeneous ownership types has predominated the increasingly intensified hospital market competition in China. In order to adapt to the raising demand of health care in China, it is highly recommended that strategies forged at governmental levels be focused on primary care promotion, guiding the development of private hospitals as well as on promoting orderly competition in the hospital market.

Does hospital competition improve efficiency? The effect of the patient choice reform in England

We use the 2006 relaxation of constraints on patient choice of hospital in the English NHS to investigate the effect of hospital competition on dimensions of efficiency including indicators of resource management (admissions per bed, bed occupancy rate, proportion of day cases, and cancelled elective operations) and costs (reference cost index for overall and elective activity, cleaning services costs, laundry and linen costs). We employ a quasi differences-in-differences approach and estimate seemingly unrelated regressions and unconditional quantile regressions with data on hospital trusts from 2002/2003 to 2010/2011. Our findings suggest that increased competition had mixed effects on efficiency. An additional equivalent rival increased admissions per bed by 1.1%, admissions per doctor by 0.9% and the proportion of day cases by 0.38 percentage points, but it also increased the number of cancelled elective operations by 2.5%.

Does Hospital Competition Harm Inpatient Quality? Empirical Evidence from Shanxi, China

This study aimed to determine whether hospital competition is associated with improved in-hospital mortality in Shanxi, China. We included a total of 46,959 hospitalizations for acute myocardial infarction (AMI) and 44,063 hospitalizations for pneumonia from 2015 to 2017. Hospital competition was measured as Herfindahl⁻Hirschman Index based on the patient predicted flow approach. Two-level random-intercept logistic models were applied to explore the effects of hospital competition on quality for both AMI and pneumonia diagnoses. Hospital competition exerts negative or negligible effects on inpatient quality of care, and the pattern of competition effects on quality varies by specific diseases. While hospital competition is insignificantly correlated with lower AMI in-hospital mortality (odds ratio (OR): 0.94, 95% confidence interval (CI): 0.77⁻1.11), high hospital competition was, in fact, associated with higher in-hospital mortality for pneumonia patients (OR: 1.99, 95% CI: 1.51⁻2.64). Our study suggests that simply encouraging hospital competition may not provide effective channels to improve inpatient quality of health care in China's current health care system.

Effects of asymmetric medical insurance subsidy on hospitals competition under non-price regulation

Background

Poor medical care and high fees are two major problems in the world health care system. As a result, health care insurance system reform is a major issue in developing countries, such as China. Governments should take the effect of health care insurance system reform on the competition of hospitals into account when they practice a reform. This article aims to capture the influences of asymmetric medical insurance subsidy and the importance of medical quality to patients on hospitals competition under non-price regulation.

Methods

We establish a three-stage duopoly model with quantity and quality competition. In the model, qualitative difference and asymmetric medical insurance subsidy among hospitals are considered. The government decides subsidy (or reimbursement) ratios in the first stage. Hospitals choose the quality in the second stage and then support the quantity in the third stage. We obtain our conclusions by mathematical model analyses and all the results are achieved by backward induction.

Results

The importance of medical quality to patients has stronger influence on the small hospital, while subsidy has greater effect on the large hospital. Meanwhile, the importance of medical quality to patients strengthens competition, but subsidy effect weakens it. Besides, subsidy ratios difference affects the relationship between subsidy and hospital competition. Furthermore, we capture the optimal reimbursement ratio based on social welfare maximization. More importantly, this paper finds that the higher management efficiency of the medical insurance investment funds is, the higher the best subsidy ratio is.

Conclusions

This paper states that subsidy is a two-edged sword. On one hand, subsidy stimulates medical demand. On the other hand, subsidy raises price and inhibits hospital competition. Therefore, government must set an appropriate subsidy ratio difference between large and small hospitals to maximize the total social welfare. For a developing country with limited medical resources and great difference in hospitals such as China, adjusting the reimbursement ratios between different level hospitals and increasing medical quality are two reasonable methods for the sustainable development of its health system.

On the Hospital Volume and Outcome Relationship: Does Specialization Matter More Than Volume?

OBJECTIVE

To evaluate the relationship between hospital volume and outcome by focusing on alternative measures of volume that capture specialization and overall throughput of hospitals.

DATA SOURCES/STUDY SETTING

Hospital administrative data from the state of Victoria, Australia; data contain 1,798,474 admitted episodes reported by 135 public and private acute-care hospitals.

STUDY DESIGN

This study contrasts the volume-outcome relationship using regression models with different measures of volume; two-step and single-step risk-adjustment methods are used.

DATA COLLECTION/EXTRACTION METHODS

The sample is restricted to ischemic heart disease (IHD) patients (ICD-10 codes: I20-I25) admitted during 2001/02 to 2004/05.

PRINCIPAL FINDINGS

Overall hospital throughput and degree of specialization display more substantive implications for the volume-outcome relationship than conventional caseload volume measure. Two-step estimation when corrected for heteroscedasticity produces comparable results to single-step methods.

CONCLUSIONS

Different measures of volume could lead to vastly different conclusions about the volume-outcome relationship. Hospital specialization and throughput should both be included as measures of volume to capture the notion of size, focus, and possible congestion effects.

Defining hospital's internal boundaries. An organisational complexity criterion

The aim of this paper is to provide empirical evidences supporting the definition of hospital wards' boundaries in organisational designing processes, by suggesting services aggregation criteria that are focused on organisational complexity. In order to test the research hypotheses, a panel data analysis was conducted on Lombardy hospitals in Italy. Information was gathered both from administrative records - aggregated at in-patient ward level - and general registry offices. The results highlight that the wards offering integrated services perform better than those that are more specialised. However, for growing levels of within-complexity, the positive effects of formal integration between wards tend to reduce. Some guidelines for practitioners engaged in defining hospitals' organisational structures can be drawn from the empirical analysis.