Consolidation and concentration in the German hospital market: the two sides of the coin

[The Effect of Service Concentration on Outcome Quality in Obstetrics Departments - An Empirical Analysis of Newborn Mortality in German Hospitals]

The effect of service concentration on outcome quality of inpatient services in the hospital sector is debated, and is particularly important in the field of obstetrics. The aim of this article was to investigate the influence of volume-outcome factors and competitive economic parameters on the quality of outcomes in obstetric departments of German hospitals. In this study, structural and performance data on 412 German hospitals in 2021 were analyzed with a quantitative research approach. To test the hypotheses, a polynomial multiple regression model with a total of eleven independent variables was estimated. Newborn mortality was used as an indicator of outcome quality in obstetrics departments. Contrary to expectations, the competitive economic parameters that are important for births play a rather subordinate role, while strong empirical evidence was found for volume-outcome relationships. The results of this study suggest that positive quality effects of service concentrations also predominate in the field of obstetrics and thus provide evidence in support of the forthcoming hospital reform in Germany.

Modelling the effect of demographic change and healthcare infrastructure on the patient structure in German hospitals - a longitudinal national study based on official hospital statistics

BACKGROUND

Effects of demographic change, such as declining birth rates and increasing individual life expectancy, require health system adjustments offering age- and needs-based care. In addition, healthcare factors can also influence health services demand.

METHODS

The official German hospital statistics database with odd-numbered years between 1995 and 2011 was analysed. This is a national comprehensive database of all general hospital inpatient services delivered. Official data from hospital statistics were linked at the district level with demographic and socio-economic data as well as population figures from the official regional statistics. Panel data regression, modelling case numbers per hospital, was performed for 13 diagnosis groups that characterised the patient structure. Socio-demographic variables included age, sex, household income, and healthcare factors included bed capacity, personnel and hospital characteristics.

RESULTS

The median number of annual treatments per hospital increased from 6 015 (5th and 95th percentile [670; 24 812]) in 1995 to 7 817 in 2011 (5th and 95th percentile [301; 33 651]). We developed models characterising the patient structure of health care in Germany, considering both socio-demographic and hospital factors. Demographic factors influenced case numbers across all major diagnosis groups. For example, the age groups 65-74 and 75 + influenced cerebrovascular disease case numbers (p < 0.001). Other important factors included human and material resources of hospitals or the household income of patients. Distinct differences between the models for the individual diagnosis groups were observed.

CONCLUSIONS

Hospital planning should not only consider demographic change but also hospital infrastructure and socio-economic factors.

Impact of a digitized workflow for knee endoprothesis implantations on hospital-specific ratios

BACKGROUND: The continuous decrease of healthcare resources requires hospitals to improve efficiency while striving to improve quality standards that deliver better patient outcomes. OBJECTIVE: The objective of this study was to analyze whether the implementation of digital support systems during orthopedic surgery positively affected clinical processes and quality ratios. METHODS: A retrospective case-control study of 297 knee joint replacement procedures was conducted between 2015 and 2020. Thirty-five patients were allocated to the treatment and control groups after they were identified with exact matching and estimation of the propensity score. Both groups were balanced regarding the selected covariates. The effect of the surgical procedure manager (SPM) on the incidence of acute haemorrhagic anaemia between the two groups was evaluated with a t-test, and the odds ratio was calculated. RESULTS: SPM-supported surgery has no significant influence on the incidence of acute haemorrhagic anaemia but leads to significantly shorter hospital stay (1.93 days), changeover (4.14 minutes) and recovery room time (20.20 minutes). In addition, it reduces the standard deviation of operation room times. CONCLUSIONS: The study concludes that SPM enhances surgical efficiency and maintains quality outcomes. To overcome their increasing financial pressure hospital management should commercially evaluate the implementation of digital support systems.

Can competition improve hospital quality of care? A difference-in-differences approach to evaluate the effect of increasing quality transparency on hospital quality

Public reporting on the quality of care is intended to guide patients to the provider with the highest quality and to stimulate a fair competition on quality. We apply a difference-in-differences design to test whether hospital quality has improved more in markets that are more competitive after the first public release of performance data in Germany in 2008. Panel data from 947 hospitals from 2006 to 2010 are used. Due to the high complexity of the treatment of stroke patients, we approximate general hospital quality by the 30-day risk-adjusted mortality rate for stroke treatment. Market structure is measured (comparatively) by the Herfindahl-Hirschman index (HHI) and by the number of hospitals in the relevant market. Predicted market shares based on exogenous variables only are used to compute the HHI to allow a causal interpretation of the reform effect. A homogenous positive effect of competition on quality of care is found. This effect is mainly driven by the response of non-profit hospitals that have a narrow range of services and private for-profit hospitals with a medium range of services. The results highlight the relevance of outcome transparency to enhance hospital quality competition.

Adoption of large-scale medical equipment: the impact of competition in the German inpatient sector

The availability of large-scale medical equipment such as computed tomography (CT), magnet resonance imaging (MRI) and positron emission tomography (PET) scanners has increased rapidly worldwide over the last decades. Among OECD countries, Germany ranks high according to the number of imaging technologies and their applications per inhabitant. In contrast to other countries, there is no active governmental planning of large-scale medical equipment. We therefore investigated whether and how the adoption and distribution of CT, MRI and PET scanners in the German inpatient sector is subject to competition. Using a linear-probability model, we additionally examined the impact of regional, hospital- and population-based factors. In summary, our results indicate that the adoption rate by hospital sites decreases with the number of other sites being already equipped with the respective device and their proximity. However, the effect presumably depends on the technologies' stage within the diffusion process. No influence regarding the amount of state subsidies could be identified. Furthermore, hospital size and university status strongly affect the adoption.

For-Profit Hospitals Have Thrived Because of Generous Public Reimbursement Schemes, Not Greater Efficiency: A Multi-Country Case Study

For-profit hospitals' market share has increased in many nations over recent decades. Previous studies suggest that their growth is not attributable to superior performance on access, quality of care, or efficiency. We analyzed other factors that we hypothesized may contribute to the increasing role of for-profit hospitals. We studied the historical development of the for-profit hospital sector across 4 nations with contrasting trends in for-profit hospital market share: the United States, the United Kingdom, Germany, and the Netherlands. We focused on 3 factors that we believed might help explain why the role of for-profits grew in some nations but not in others: (1) the treatment of for-profits by public reimbursement plans, (2) physicians' financial interests, and (3) the effect of the political environment. We conclude that access to subsidies and reimbursement under favorable terms from public health care payors is an important factor in the rise of for-profit hospitals. Arrangements that aligned financial incentives of physicians with the interests of for-profit hospitals were important in stimulating for-profit growth in an earlier era, but they play little role at present. Remarkably, the environment for for-profit ownership seems to have been largely immune to political shifts.

Disruptive life event or reflexive instrument? On the regulation of hospital mergers from a quality of care perspective

PURPOSE

Despite the continuation of hospital mergers in many western countries, it is uncertain if and how hospital mergers impact the quality of care. This poses challenges for the regulation of mergers. The purpose of this paper is to understand: how regulators and hospitals frame the impact of merging on the quality and safety of care and how hospital mergers might be regulated, given their uncertain impact on quality and safety of care.

DESIGN/METHODOLOGY/APPROACH

This paper studies the regulation of hospital mergers in The Netherlands. In a qualitative study design, it draws on 30 semi-structured interviews with inspectors from the Dutch Health and Youth Care Inspectorate (Inspectorate) and respondents from three hospitals that merged between 2013 and 2015. This paper draws from literature on process-based regulation to understand how regulators can monitor hospital mergers.

FINDINGS

This paper finds that inspectors and hospital respondents frame the process of merging as potentially disruptive to daily care practices. While inspectors emphasise the dangers of merging, hospital respondents report how merging stimulated them to reflect on their care practices and how it afforded learning between hospitals. Although the Inspectorate considers mergers a risk to quality of care, their regulatory practices are hesitant.

ORIGINALITY/VALUE

This qualitative study sheds light on how merging might affect key hospital processes and daily care practices. It offers opportunities for the regulation of hospital mergers that acknowledges rather than aims to dispel the uncertain and potentially ambiguous impact of mergers on quality and safety of care.

Physician-leaders and hospital performance revisited

Reflecting the increasing relevance of quality outcomes for hospital payments, some hospital boards have promoted physicians into top-management positions. So far, however, the literature regarding the impact of physician leadership on care quality or cost is limited. The aim of this study is to examine the link between the educational background of a hospital's CEO and its performance in terms of medical quality and financial success. Examining data of 370 German hospitals for the year 2016, this study uses the second largest sample of its kind and the largest for a single country. Multivariate regression analysis with matching is used to model the effect of the CEO's education, controlling for tenure, competition, hospital size and ownership. We find that physician-led hospitals have lower in-hospital mortality rates for pneumonia and higher patient satisfaction (at the 5% and 1% significance level, respectively). In contrast, institutions led by managers with economics or business degrees have better financial performance (at the 10% significance level) and superior outcomes for hip and knee surgeries (at the 1% and 10% significance level). Our findings support prior results regarding financial outcomes and mortality. However, including a broad spectrum of measures for clinical quality, we draw a more nuanced picture that does not point to the straightforward interpretation that physician CEOs lead to superior medical quality.

Trends and regional variation in rates of orthopaedic surgery in Germany: the impact of competition

Competition in hospital services has been fostered in an increasing number of OECD countries with the goal that hospitals improve quality and/or efficiency. With the same intention competition has been promoted in Germany when introducing a system of prospective payments based on diagnosis-related groups (DRGs) in 2003. Beyond its intended effects, however, the reform led to a substantial increase in hospital activity, particularly for orthopaedic surgery. To shed more light on these developments, this paper analyses the relationship between the rates of certain orthopaedic surgical procedures and hospital competition across and within each of Germany's 402 districts. We measured competition with the Herfindahl-Hirschman Index (HHI) based on market shares for hip replacements, knee replacements and spine surgeries. Using spatial panel regression, which allows for spatial dependency and unobserved individual heterogeneity, we found that the rate of hip and knee replacements rose as market concentration increased. A potential explanation might be that hospitals specialize in these particular procedures.

The Choice of Transcatheter Aortic Valve Implementation (TAVI): Do Patient Co-morbidity and Hospital Ownership Type Matter?

BACKGROUND

Innovative technologies challenge healthcare systems, as evidence on costs and benefits frequently usually are slow to reflect new technology. We investigated these dynamics for Germany, using the emergence of transcatheter aortic valve implementation (TAVI) as an alternative to conventional aortic valve replacements (CAVR).

OBJECTIVE

We focused on the role of patient co-morbidity-which would be a medical explanation for adopting TAVI-and hospital ownership status, hypothesizing that for-profit facilities are more likely to capitalize on the favorable reimbursement conditions of TAVI.

METHODS

The analysis uses claims data from the Techniker Krankenkasse, the largest health insurance fund in Germany, for the years 2009-2015, covering 2892 patients with TAVI and 9523 with CAVR. The decision on TAVI versus CAVR was estimated for patient-level data, that is, socioeconomic data as well as co-morbidity. At the hospital level, we included the ownership type. We also controlled for effects of the respective owner (rather than the type of ownership), including a random intercept.

RESULTS

While the co-morbidity score of TAVI patients was much higher in the early years, over time, the score almost converged with that of CAVR patients. This is in agreement with emerging evidence that suggests the use of TAVI also leads to better patient outcomes. Our results indicate that the type of ownership does not drive the switch to TAVI. We found little, if any, effect from the respective owner, regardless of ownership type.

CONCLUSION

Overall, the effects of co-morbidity suggest that providers acted responsibly when adopting TAVI while evidence was still emerging.

The Volume-Outcome Relationship Revisited: Practice Indeed Makes Perfect

OBJECTIVE

To examine the causal effect of a hospital's experience with treating hip fractures (volume) on patient treatment outcomes.

DATA SOURCES

We use a full sample of administrative data from German hospitals for 2007. The data provide detailed information on patients and hospitals. We also reference the hospitals' addresses and the zip codes of patients' place of residence.

STUDY DESIGN

We apply an instrumental variable approach to address endogeneity concerns due to reverse causality and unobserved patient heterogeneity. As instruments for case volume, we use the number of potential patients and number of other hospitals in the region surrounding each hospital.

PRINCIPAL FINDINGS

Our results indicate that after applying an instrumental variables (IV) regression of volume on outcome, volume significantly increases quality.

CONCLUSIONS

We provide evidence for the practice-makes-perfect hypothesis by showing that volume is a driving factor for quality.

Utilization Management in a Large Community Hospital

The utilization management of laboratory tests in a large community hospital is similar to academic and smaller community hospitals. There are numerous factors that influence laboratory utilization. Outside influences like hospitals buying physician practices, increasing numbers of hospitalists, and hospital consolidation will influence the number and complexity of the test menu that will need to be monitored for over and/or under utilization in the central laboratory and reference laboratory. CLIA’88 outlines the four test categories including point-of-care testing (waived) and provider-performed microscopy that need laboratory test utilization management. Incremental cost analysis is the most efficient method for evaluating utilization reduction cost savings. Economies of scale define reduced unit cost per test as test volume increases. Outreach programs in large community hospitals provide additional laboratory tests from non-patients in physician offices, nursing homes, and other hospitals. Disruptive innovations are changing the present paradigms in clinical diagnostics, like wearable sensors, MALDI-TOF, multiplex infectious disease panels, cell-free DNA, and others. Obsolete tests need to be universally defined and accepted by manufacturers, physicians, laboratories, and hospitals, to eliminate access to their reagents and testing platforms.

A qualitative study of diverse providers' behaviour in response to commissioners, patients and innovators in England: research protocol

INTRODUCTION

The variety of organisations providing National Health Service (NHS)-funded services in England is growing. Besides NHS hospitals and general practitioners (GPs), they include corporations, social enterprises, voluntary organisations and others. The degree to which these organisational types vary, however, in the ways they manage and provide services and in the outcomes for service quality, patient experience and innovation, remains unclear. This research will help those who commission NHS services select among the different types of organisation for different tasks.

RESEARCH QUESTIONS

The main research questions are how organisationally diverse NHS-funded service providers vary in their responsiveness to patient choice, NHS commissioning and policy changes; and their patterns of innovation. We aim to assess the implications for NHS commissioning and managerial practice which follow from these differences.

METHODS AND ANALYSIS

Systematic qualitative comparison across a purposive sample (c.12) of providers selected for maximum variety of organisational type, with qualitative studies of patient experience and choice (in the same sites). We focus is on NHS services heavily used by older people at high risk of hospital admission: community health services; out-of-hours primary care; and secondary care (planned orthopaedics or ophthalmology). The expected outputs will be evidence-based schemas showing how patterns of service development and delivery typically vary between different organisational types of provider.

ETHICS, BENEFITS AND DISSEMINATION

We will ensure informants' organisational and individual anonymity when dealing with high profile case studies and a competitive health economy. The frail elderly is a key demographic sector with significant policy and financial implications. For NHS commissioners, patients, doctors and other stakeholders, the main outcome will be better knowledge about the relative merits of different kinds of healthcare provider. Dissemination will make use of strategies suggested by patient and public involvement, as well as DH and service-specific outlets.

Human resource crises in German hospitals--an explorative study

BACKGROUND

The complexity of providing medical care in a high-tech environment with a highly specialized, limited labour force makes hospitals more crisis-prone than other industries. An effective defence against crises is only possible if the organizational resilience and the capacity to handle crises become part of the hospitals' organizational culture. To become more resilient to crises, a raised awareness--especially in the area of human resource (HR)--is necessary. The aim of this paper is to contribute to the process robustness against crises through the identification and evaluation of relevant HR crises and their causations in hospitals.

METHODS

Qualitative and quantitative methods were combined to identify and evaluate crises in hospitals in the HR sector. A structured workshop with experts was conducted to identify HR crises and their descriptions, as well as causes and consequences for patients and hospitals. To evaluate the findings, an online survey was carried out to rate the occurrence (past, future) and dangerousness of each crisis.

RESULTS

Six HR crises were identified in this study: staff shortages, acute loss of personnel following a pandemic, damage to reputation, insufficient communication during restructuring, bullying, and misuse of drugs. The highest occurrence probability in the future was seen in staff shortages, followed by acute loss of personnel following a pandemic. Staff shortages, damage to reputation, and acute loss of personnel following a pandemic were seen as the most dangerous crises.

CONCLUSIONS

The study concludes that coping with HR crises in hospitals is existential for hospitals and requires increased awareness. The six HR crises identified occurred regularly in German hospitals in the past, and their occurrence probability for the future was rated as high.

Defining hospital markets - an application to the German hospital sector

The correct definition of the product market and of the geographic market is a prerequisite for assessing market structures in antitrust cases. For hospital markets, both dimensions are controversially discussed in the literature. Using data for the German hospital market we aim at elaborating the need for differentiating the product market and at investigating the effects of different thresholds for the delineation of the geographic market based on patient flows. Thereby we contribute to the scarce empirical evidence on the structure of the German hospital market. We find that the German hospital sector is highly concentrated, confirming the results of a singular prior study. Furthermore, using a very general product market definition such as "acute in-patient care" averages out severe discrepancies that become visible when concentration is considered on the level of individual diagnoses. In contrast, varying thresholds for the definition of the geographic market has only impact on the level of concentration, while the correlation remains high. Our results underline the need for more empirical research concerning the definition of the product market for hospital services.

Concentration of gynaecology and obstetrics in Germany: is comprehensive access at stake?

Financial soundness will become more and more difficult in the future for all types of hospitals. This is particularly relevant for gynaecology and obstetrics departments: while some disciplines can expect higher demand due to demographic changes and progress in medicine and medical technology, the inpatient sector for gynaecology and obstetrics is likely to lose patients in line with these trends. In this paper we estimate future demand for gynaecology and obstetrics in Germany and develop a cost model to calculate the average profitability in this discipline. The number of inpatient cases in gynaecology and obstetrics can be expected to decrease by 3.62% between 2007 and 2020 due to the demographic change and a potential shift from inpatient to outpatient services. Small departments within the fields of gynaecology and obstetrics are already incurring heavy losses, and the anticipated decline in cases should increase this financial distress even more. As such, the further centralisation of services is indicated. We calculate travel times for gynaecology and obstetrics patients and estimate the anticipated changes in travel times by simulating different scenarios for this centralisation process. Our results show that the centralisation of hospital services in gynaecology and obstetrics may be possible without compromising comprehensive access as measured by travel times.

Stroke Unit Care and Trends of In-Hospital Mortality for Stroke in Germany 2005–2010

Background

In Germany, the financing of stroke unit care was implemented into the hospital reimbursement system in 2006. Since then, many acute care hospitals newly implemented stroke units. Simultaneous, in-hospital mortality for stroke declined.

Aims

The study aims to analyze the association of mortality trends for stroke with the increasing provision of stroke unit care in German hospitals.

Methods

Hospitalizations for acute stroke from 2005 to 2010 are identified in the nationwide German Diagnosis Related Groups statistics. Trends of risk-adjusted in-hospital mortality are studied stratified by existence of a stroke unit in the admitting hospital, as well as stratified by cohorts of hospitals defined by the respective period of stroke unit implementation.

Results

Overall, mortality in patients admitted to stroke unit hospitals is lower (crude 9·2%; adjusted 9·8%) compared to patients admitted to nonstroke unit hospitals (12·7%; 11·6%). The longitudinal analysis revealed a general secular trend of declining mortality in all cohorts of hospitals. However, while all stroke unit-providing hospital cohorts converge to a quite similar level of mortality in 2010, mortality in hospitals without stroke unit remains significantly higher. Reduction of mortality in hospitals with early provision of stroke unit care seems to be attributable to the secular trend. A reduction of mortality exceeding the secular trend was observed in hospitals with late stroke unit implementation.

Conclusions

The earlier stroke unit implementations might represent rather ‘formal’ inceptions in experienced hospitals with preexisting appropriate stroke care, whereas late implementations seem to have caused extra improvements. Overall, stroke patients are more likely to survive when admitted to an stroke unit-providing hospital. A more stringent assignment of acute stroke patients to stroke unit-providing hospitals could possibly further reduce stroke mortality in Germany.

Plural provision of primary medical care in England, 2002–2012

Objectives:

Health care reforms often include provider diversification, including privatization, to increase competition and thereby health care quality and efficiency. Donabedian's organizational theory implies that the consequences will vary according to the providers' ownership. The aim was to examine how far that theory applies to changes in English NHS primary medical care (general practice) since 1998, and the consequences for patterns of service provision.

Methods:

Framework analysis whose categories and structure reflected Donabedian's theory and its implications, populated with data from a systematic review, administrative sources and press rapportage.

Results:

Two patterns of provider diversification occurred: 'native' diversification among existing providers and plural provision as providers with different types of ownership were introduced. Native diversification occurred through: extensive recruitment of salaried GPs; extending the range of services provided by general practices; introducing limited liability partnerships; establishing GPs with special clinical interests; and introducing a wider range of services for GPs to refer to. All of these had little apparent effect on competition between general practices. Plural provision involved: increased primary care provision by corporations; introducing GP-owned firms; establishing social enterprises (initially mostly out-of-hours cooperatives); and Primary Care Trusts taking over general practices. Plural provision was on a smaller scale than native diversification and appeared to go into reverse in 2011.

Conclusions:

Although the available data confirm the implications of Donabedian's theory, there are exceptions. Native diversification and plural provision policies differ in their implications for service development.