Can hospitals compete on quality? Hospital competition

Does hospital competition lead to medical equipment expansion? Evidence on the medical arms race

With the implementation of a series of pro-competition policies in China, the hospital market competition has been intensified dramatically over the past decade. Based on previous literature, such competition is very much likely to bring about an upgoing trend in the promotion and expansion of medical facilities among hospitals as an essential strategy for attracting patients, which is known as Medical Arms Race (MAR). Comprehensive evaluations have been conducted by previous studies on the consequences of the MAR, which, however, merely provided inadequate empirical evidence on the relationship between hospital competition and MAR. Utilizing the variations in hospital competition across various regions and through different time periods in Sichuan Province as a prototype representative of the nationwide situation, a dynamic panel data model was established and adopted in this study for investigating whether intensified hospital competition had resulted in the expansion of medical facilities in China during the corresponding time period. The geopolitical boundaries and Herfindahl-Hirschman Index (HHI) were respectively employed to define the hospital market and measure the competition degree. We found that a 10% reduction in HHI is associated with an 8.79% increase in regional total costs of advanced medical equipment per capita, suggesting that hospital competition would lead to medical equipment expansion. Our results provide novel evidence on MAR which is particularly applicable for the healthcare system in China, providing suggestions for nationwide healthcare reform in order to mitigate potential negative outcomes induced by the implementation of pro-competition policies.

What Can We Learn From Point-of-Care Blood Glucose Values Deleted and Repeated by Nurses?

BACKGROUND

Hospitals rely on point-of-care (POC) blood glucose (BG) values to guide important decisions related to insulin administration and glycemic control. Evaluation of POC BG in hospitalized patients is associated with measurement and operator errors. Based on a previous quality improvement (QI) project we introduced an option for operators to delete and repeat POC BG values suspected as erroneous. The current project evaluated our experience with deleted POC BG values over a 2-year period.

METHOD

A retrospective QI project included all patients hospitalized at two regional academic medical centers in the Pacific Northwest during 2014 and 2015. Laboratory Medicine POC BG data were reviewed to evaluate all inpatient episodes of deleted and repeated POC BG.

RESULTS

Inpatient operators choose to delete and repeat only 0.8% of all POC BG tests. Hypoglycemic and extreme hyperglycemic BG values are more likely to be deleted and repeated. Of initial values <40 mg/dL, 58% of deleted values (18% of all values) are errors. Of values >400 mg/dL, 40% of deleted values (5% of all values) are errors. Not all repeated POC BG values are first deleted. Optimal use of the option to delete and repeat POC BG values <40 mg/dL could decrease reported rates of severe hypoglycemia by as much as 40%.

CONCLUSIONS

This project demonstrates that operators are frequently able to identify POC BG values that are measurement/operator errors. Eliminating these errors significantly reduces documented rates of severe hypoglycemia and hyperglycemia, and has the potential to improve patient safety.

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.