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

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.

Heterogeneous effects of hospital competition on inpatient quality: an analysis of five common diseases in China

BACKGROUND

Many countries has introduced pro-competition policies in the delivery of healthcare to improve medical quality, including China. With the increasing intensity of competition in China's healthcare market, there are rising concerns among policymakers about the impact of hospital competition on quality. This study investigated heterogeneous effects of hospital competition on inpatient quality.

METHODS

We analyzed the inpatient discharge dataset and selected chronic obstructive pulmonary disease (COPD), ischemic stroke, pneumonia, hemorrhagic stroke, and acute myocardial infarction (AMI) as representative diseases. A total of 561,429 patients in Sichuan Province in 2017 and 2019 were included. The outcomes of interest were in-hospital mortality and 30-day unplanned readmissions. The Herfindahl-Hirschman Index was calculated using predicted patient flows to measure hospital competition. To address the spatial correlations of hospitals and the structure of the dataset, the multiple membership multiple classification model was employed for analysis.

RESULTS

Amid intensifying competition in the hospital market, our study discerned no marked statistical variance in the risk of inpatient quality across most diseases examined. Amplified competition exhibited a positive correlation with heightened in-hospital mortality for both COPD and pneumonia patients. Elevated competition escalated the risk of 30-day unplanned readmissions for COPD patients, while inversely affecting the risk for AMI patients.

CONCLUSIONS

There is the heterogeneous impact of hospital competition on quality across various diseases in China. Policymakers who intend to leverage hospital competition as a tool to enhance healthcare quality must be cognizant of the possible influences of it.

Understanding Factors Influencing Geographic Variation in Healthcare Expenditures: A Small Areas Analysis Study

Dramatic geographic variations in healthcare expenditures were documented by developed countries, but little is known about such variations under China's context, and what causes such variations. This study aims to examine variations of healthcare expenditures among small areas and to determine the associations between demand-, supply-factors, and per capita inpatient expenditures. This cross-sectional study utilized hospital discharge data aggregated within delineated hospital service areas (HSAs) using the small-area analysis approach. Linear multivariate regression modeling with robust standard errors was used to estimate the sources of variation of per capita inpatient expenditures across HSAs covering the years 2017 to 2019; the Shapley value decomposition method was used to measure the respective contributions of demand-, supply-side to such variations. Among 149 HSAs, demand factors explained most of the (87.4%) overall geographic variation among HSAs. With each 1% increase in GDP per capita and urbanization rate was associated with 0.099% and 0.9% increase in inpatient expenditure per capita, respectively, while each 1% increase in the share of females and the unemployment rate was associated with a 0.7% and 0.4% reduction in the per capita inpatient expenditures, respectively. In supply-side, for every 1 increase in hospital beds per 1000 population, the per capita inpatient expenditures rose by 2.9%, while with every 1% increase in the share of private hospitals, the per capita inpatient expenditures would decrease by 0.4%. With Herfindahl-Hirschman Index decrease 10%, the per capita inpatient expenditures would increase 1.06%. This study suggests demand-side factors are associated with large geographic variation in per capita inpatient expenditures among HSAs, while supply-side factors played an important role. The evaluation of geographic variations in per capita inpatient expenditures as well as its associated factors have great potential to provide an indirect approach to identify possibly existing underutilized or overutilized healthcare procedures.

Impacts of the medical arms race on medical expenses: a public hospital-based study in Shenzhen, China, during 2009-2013

BACKGROUND

Has the medical arms race (MAR) increased healthcare expenditures? Existing literature has yet to draw a consistent conclusion. Hence, this study aims to reexamine the relationship between the MAR and medical expenses by the data from public hospitals in Shenzhen, China, during the period of 2009 to 2013.

METHODS

This study's data were collected through panel datasets spanning 2009 to 2013 from the Shenzhen Statistical Yearbook, Shenzhen Health Statistical Yearbook, and annual reports from the Shenzhen Municipal Health Commission. The Herfindahl-Hirschman index and hierarchical linear modeling were combined for empirical analysis.

RESULTS

The MAR's impact on medical examination fees differed during the inpatient and outpatient stages. Further analysis verified that the MAR had the most significant impact on outpatient examination fees. Due to the characteristics of China's medical system, government regulations in the healthcare market may consequently accelerate the MAR among public hospitals. Strict government regulations on the medical system have also promoted increased medical examination costs to some extent. Once medical service prices are under strict administrative control, only drug and medical examination fees are the primary forms of extra income for hospitals. After the proportion of drug fees is further regulated, medical examinations will then become another staple method to generate extra revenue. These have distorted Chinese public hospitals' medical fees, which completely differ from those in other countries.

CONCLUSION

The government should confirm that they have allocated sufficient financial investments for public hospitals; otherwise, the competition among hospitals will transfer the burden to patients, and especially to those who can afford to pay for care. A core task for public hospitals involves providing safer, less expensive, and more reliable medical services.

Exploring the nexus of equality and efficiency in healthcare

Purpose

This study aims to explore the nexus of equality and efficiency by considering public hospitals' development dynamics, capacity and technology indicators.

Design/methodology/approach

Data was collected from the Ministry of Health Public Hospital Almanacs from 2014 to 2017. The Gini index (GI) is used to estimate the inequality of distribution of hospital performance indicators. A bias-corrected efficiency analysis is calculated to obtain efficiency scores of public hospitals for the year 2017. A path analysis is then constructed to better identify patterns of causation among a set of development, equality and efficiency variables.

Findings

A redefined path model highlights that development dynamics, equality and efficiency are causally related and health technology (path coefficient = 0.57; t = 19.07; p < 0.01) and health services utilization (path coefficient = 0.24; t = 8; p < 0.01) effects public hospital efficiency. The final path model fit well (X2/df = 50.99/8 = 6; RMSEA = 0.089; NFI = 0.95; CFI = 0.96; GFI = 0.98; AGFI = 0.94). Study findings indicate high inequalities in distribution of health technologies (GI > 0.85), number of surgical operations (GI > 0.70) and number of inpatients (GI > 0.60) among public hospitals for the years 2014–2017.

Originality/value

Study results highlight that, hospital managers should prioritize equal distribution of health technology and health services utilization indicators to better orchestrate equity-efficiency trade-off in their operations.

Heterogeneous effects of hospital competition on inpatient expenses: an empirical analysis of diseases grouping basing on conditions' complexity and urgency

Background

Multiple pro-competition policies were implemented during the new round of healthcare reform in China. Differences in conditions’ complexity and urgency across diseases associating with various degrees of information asymmetry and choice autonomy in the process of care provision, would lead to heterogeneous effects of competition on healthcare expenses. However, there are limited studies to explore it. This study aims to examine the heterogeneous effects of hospital competition on inpatient expenses basing on disease grouping according to conditions’ complexity and urgency.

Methods

Collecting information from discharge data of inpatients and hospital administrative data of Sichuan province in China, we selected representative diseases. K-means clustering was used to group the selected diseases and Herfindahl-Hirschman Index (HHI) was calculated based on the predicted patient flow to measure the hospital competition. The log-linear multivariate regression model was used to examine the heterogeneous effects of hospital competition on inpatient expenses.

Results

We selected 19 representative diseases with significant burdens (more than 1.1 million hospitalizations). The selected diseases were divided into three groups, including diseases with highly complex conditions, diseases with urgent conditions, and diseases with less complex and less urgent conditions. For diseases with highly complex conditions and diseases with urgent conditions, the estimated coefficients of HHI are mixed in the direction and statistical significance in the identical regression model at the 5% level. For diseases with less complex and less urgent conditions, the coefficients of HHI are all positive, and almost all of them significant at the 5% level.

Conclusions

We found heterogeneous effects of hospital competition on inpatient expenses across disease groups: hospital competition does not play an ideal role in reducing inpatient expenses for diseases with highly complex conditions and diseases with urgent conditions, but it has a significant effect in reducing inpatient expenses of diseases with less complex and less urgent conditions. Our study offers implications that the differences in condition’s complexity and urgency among diseases would lead to different impacts of hospital competition, which would be given full consideration when designing the pro-competition policy in the healthcare delivery system to achieve the desired goal.

Supplementary Information

The online version contains supplementary material available at 10.1186/s12913-021-07331-1.

COVID-19 as an opportunity to reveal the impact of large hospital expansion on the healthcare delivery system: evidence from Shanghai, China

Background

The expansion of large hospitals on the medical service market's supply side has always been an intensely debated topic. In this study, we conducted statistical analysis on the natural shock of COVID-19 to investigate whether the large hospitals will draw health demand from the small hospitals when a supply capacity surplus is present, a phenomenon otherwise known as the "siphon effect".

Methods

We collected the monthly hospital income and service data, including outpatient income, inpatient income, number of visits, and discharges, from all public hospitals, from January 2018 to July 2020 in Shanghai. A difference-in-differences (DIDs) method was applied to analyze the existence of the large hospitals' siphon effect by identifying the differences in the healthcare service market share change between large and small hospital groups at the height of pandemic (February and March, 2020) and the postpandemic period (April and May, 2020). Case mix index (CMI) was used to verify whether the reduction in healthcare amount and market share of small hospitals was due to unnecessary care.

Results

In total, 156 public hospitals, including 46 large hospitals and 110 small hospitals, with an average number of beds of 1,079.21 and 345.25, respectively, were involved in this study. At the height of the pandemic, the healthcare service volume and revenue in public hospitals in Shanghai experienced a sharp decline, especially for large hospitals and inpatient services. Compared to small hospitals at the height of the COVID-19 pandemic, large hospitals' market share decreased significantly in outpatient and inpatient services for overall and nonlocal patients (P<0.05). During the postpandemic period, large hospitals' market share increased significantly in outpatient and inpatient services for overall and local patients (P<0.05). This increase was more substantial in inpatient services.

Conclusions

Under conditions of the COVID-19 pandemic of higher care-seeking costs in the large hospitals, some of the healthcare services typically provided by large hospitals were then supplied by small hospitals. Furthermore, the siphon effect of large hospitals could be clearly observed when a supply capacity surplus was present and external constraint on patients' care-seeking behavior was absent.

Comparing quality of primary healthcare between public and private providers in China: study protocol of a cross-sectional study using unannounced standardised patients in seven provinces of China

INTRODUCTION

The Chinese government has encouraged the development of private sector in delivering healthcare, including primary healthcare (PHC) in the new round of national health reform since 2009. However, the debate about the role of the private sector in achieving universal health coverage continues with poor support from theories and empirical evidence. This study intends to compare the quality of PHC services between the private and public providers in seven provinces in China, using unannounced standardised patients (USPs).

METHODS

We are developing and validating 13 USP cases most commonly observed in the PHC setting. Six domains of quality will be assessed by the USP: effectiveness, safety, patient centredness, efficiency, timeliness and equity. The USP will make 2200 visits to 705 public and 521 private PHC institutions across seven provinces, following a multistage clustered sample design. Using each USP-provider encounter as the analytical unit, we will first descriptively compare the raw differences in quality between the private and public providers and then analyse the association of ownership types and quality, using propensity score weighting.

ETHICS AND DISSEMINATION

The study was primarily funded by the National Natural Science Foundation of China (#71974211, #71874116 and # 72074163) and was also supported by the China Medical Board (#16-260, #18-300 and #18-301), and have received ethical approval from Sun Yat-sen University (#2019-024). The validated USP tool and the data collected in this study will be freely available for the public after the primary analysis of the study.

TRIAL REGISTRATION NUMBER

Chinese Clinical Trial Registry: #ChiCTR2000032773.