Does price deregulation in a competitive hospital market damage quality?

Does competition improve hospital performance: a DEA based evaluation from the Netherlands

Many countries have introduced competition among hospitals aiming to improve their performance. We evaluate the introduction of competition among hospitals in the Netherlands over the years 2008-2015. The analysis is based on a unique longitudinal data set covering all Dutch hospitals and health insurers, as well as demographic and geographic data. We measure hospital performance using Data Envelopment Analysis and distinguish three components of competition: the fraction of freely negotiated services, market power of hospitals, and insurer bargaining power. We present new methods to define variables for each of these components which are more accurate than previously developed measures. In a multivariate regression analysis, the variables explain more than half of the variance in hospital efficiency. The results indicate that competition between hospitals and the relative fraction of freely negotiable health services are positively related to hospital efficiency. At the same time, the policy measure to steadily increase the fraction of health services contracted in competition may well have resulted in a decrease in hospital efficiency. The models show no significant association between insurer bargaining power and hospital efficiency. Altogether, the results offer little evidence that the introduction of competition for hospital care in the Netherlands has been effective.

Competition and efficiency in repeated procurements: Lessons from the Finnish rehabilitation markets

Inefficient practices and lack of competition are common problems in public procurements. In this study, I examine the effects of a procurement practice reform in the Finnish rehabilitation markets where providers are acquired in a repeated manner through competitive bidding scoring auctions. Until recently, the largest public procurer did not use any systematic criteria for accepting providers, and only a few providers did not receive a contract. After the reform, providers were systematically accepted based on their capacity and the local demand. I analyze the effects of the reform on prices in physio, speech and occupational therapy services with data that covers five subsequent procurements. I use the pre-reform differences in local competition within the markets in a difference-in-differences setting. The descriptive evidence shows that the reform slowed down the rapid increase of prices in all three services. The regression analysis indicates that effects are strongest in the most competitive local physiotherapy markets. This suggests that increasing entry and competition in the less competitive services and local markets would benefit the public procurer.

Associations of hospital volume and hospital competition with short-term, middle-term and long-term patient outcomes after breast cancer surgery: a retrospective population-based study

OBJECTIVES

For oncological care, there is a clear tendency towards centralisation and collaboration aimed at improving patient outcomes. However, in market-based healthcare systems, this trend is related to the potential trade-off between hospital volume and hospital competition. We analyse the association between hospital volume, competition from neighbouring hospitals and outcomes for patients who underwent surgery for invasive breast cancer (IBC).

OUTCOME MEASURES

Surgical margins, 90 days re-excision, overall survival.

DESIGN, SETTING, PARTICIPANTS

In this population-based study, we use data from the Netherlands Cancer Registry. Our study sample consists of 136 958 patients who underwent surgery for IBC between 2004 and 2014 in the Netherlands.

RESULTS

Our findings show that treatment types as well as patient and tumour characteristics explain most of the variation in all outcomes. After adjusting for confounding variables and intrahospital correlation in multivariate logistic regressions, hospital volume and competition from neighbouring hospitals did not show significant associations with surgical margins and re-excision rates. For patients who underwent surgery in hospitals annually performing 250 surgeries or more, multilevel Cox proportional hazard models show that survival was somewhat higher (HR 0.94). Survival in hospitals with four or more (potential) competitors within 30 km was slightly higher (HR 0.97). However, this effect did not hold after changing this proxy for hospital competition.

CONCLUSIONS

Based on the selection of patient outcomes, hospital volume and regional competition appear to play only a limited role in the explanation of variation in IBC outcomes across Dutch hospitals. Further research into hospital variation for high-volume tumours like the one studied here is recommended to (i) use consistently measured quality indicators that better reflect multidisciplinary clinical practice and patient and provider decision-making, (ii) include more sophisticated measures for hospital competition and (iii) assess the entire process of care within the hospital, as well as care provided by other providers in cancer networks.

Hospital competition in a national health service: Evidence from a patient choice reform

We study the impact of exposing hospitals in a National Health Service (NHS) to non-price competition by exploiting a patient choice reform in Norway in 2001. The reform facilitates a difference-in-difference approach due to plausibly exogenous (geographical) variation in pre-reform market structure. Employing rich, administrative data, covering the universe of hospital admissions from 1998 to 2005, we estimate models with hospital and treatment (DRG) fixed-effects and use only emergency admissions to limit patient selection issues. The results show that hospitals in more competitive areas have a sharper reduction in AMI mortality but no effect on stroke mortality. We also find that exposure to competition reduces all-cause mortality, shortens length of stay, but increases readmissions, though the effects are small in magnitude. In years with high (DRG) prices, the negative effect on readmissions almost vanishes. Finally, exposure to competition tends to reduce waiting times and increase admissions, but the effects must be interpreted with care as the outcomes include elective treatments.

The effects of expanded social health insurance on young mothers: Lessons from a pro-choice reform in Uruguay

With the implementation of the National Integrated Health System in 2007, the Uruguayan government extended social health insurance (SHI) to groups of individuals previously covered by the public safety net (PSN) or that paid for private insurance out-of-pocket. The policy allowed new beneficiaries to choose care from a set of private providers. In this study, we focus on the extension of SHI to adolescent mothers previously covered by the PSN. Exploiting the gradual incorporation of children of formal workers during the 2008-2013 period, and the geographic variation in the intensity of the reform, we find suggestive evidence that the increase in choice associated to the expansion of SHI decreased adolescent fertility, improved prenatal care and birthweight, and decreased first year mortality among low birthweight infants. These effects were only observed in the medium run, suggesting initial choice frictions and input shortage. We provide evidence that families increased their choice of private providers and that market concentration decreased in certain areas of the country, supporting the hypothesis that choice, and possibly competition, were the main mechanisms behind the findings.