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.

The Effects of Accountable Care Organizations Forming Preferred Skilled Nursing Facility Networks on Market Share, Patient Composition, and Outcomes.

BACKGROUND: Through participation in payment reforms such as bundled payment and accountable care organizations (ACOs), hospitals are increasingly financially responsible for health care use and adverse health events occurring after hospital discharge. To improve management and coordination of postdischarge care, ACO hospitals are establishing a closer relationship with skilled nursing facilities (SNFs) through the formation of preferred SNF networks. RESEARCH DESIGN: We evaluated the effects of preferred SNF network formation on care patterns and outcomes. We included 10 ACOs that established preferred SNF networks between 2014 and 2015 in the sample. We first investigated whether hospitals "steer" patients to preferred SNFs by examining the percentage of patients sent to preferred SNFs within each hospital before and after network formation. We then used a difference-in-difference model with SNF fixed effects to evaluate the changes in patient composition and outcomes of preferred SNF patients from ACO hospitals after network formation relative to patients from other hospitals. RESULTS: We found that preferred network formation was not associated with higher market share or better outcomes for preferred SNF patients from ACO hospitals. However, we found a small increase in the average number of Elixhauser comorbidities for patients from ACO hospitals after network formation, relative to patients from non-ACO hospitals. CONCLUSIONS: After preferred SNF network formation, there is some evidence that ACO hospitals sent more complex patients to preferred SNFs, but there was no change in the volume of patients received by these SNFs. Furthermore, preferred network formation was not associated with improvement in patient outcomes.

Impact of Environmental Regulation on Scientific and Technological Competitiveness of Resource-Based Cities in China-Based on Panel Data of 33 Resource-Based Cities.

After the economy enters a "new normal" era in China, resource-based cities are under pressure in terms of transformation, upgrading and sustainable development. This paper uses the panel data of 33 resource-based cities from 2008 to 2018 to empirically analyze the impact of environmental regulation and innovation compensation on scientific and technological competitiveness. The results show that there is a positive U-shaped relation between environmental regulation and scientific and technological competitiveness. This means that when environmental regulations exceed a certain level, continuing to increase regulations will significantly enhance technological competitiveness, but most samples are still on the left side of the turning point. At the same time, the labor productivity and fiscal capacity of non-agricultural industries in the region may have a strong regulatory effect. In a region with higher labor productivity in non-agricultural industries or stronger local fiscal capacity, environmental regulation is more likely to reflect the attribute of "innovation compensation" and advance scientific and technological competitiveness. At this stage, we should optimize the trans-regional compensation mechanism for resource-rich regions, increase investment in pollution management and ecological protection and impose stricter admission standards on industrial projects. Besides, skilled laborers should be cultivated and innovation and entrepreneurship be supported to realize the green and sustainable development of resource-based cities in the new era.

The Effects of Market Competition on Cardiologists' Adoption of Transcatheter Aortic Valve Replacement.

BACKGROUND: For decades, the prevailing assumption regarding the diffusion of high-cost medical technologies has been that competitive markets favor more aggressive adoption of new treatments by health care providers (ie, the "Medical Arms Race"). However, novel regulations governing the adoption of transcatheter aortic valve replacement (TAVR) may have disrupted this paradigm when TAVR was introduced. OBJECTIVE: The objective of this study was to assess the relationship between the market concentration of physician group practices and the adoption of TAVR in its first years of use. RESEARCH DESIGN: This was a retrospective cohort study. SUBJECTS: Physician group practices (n=5116) providing interventional cardiology services in the United States from May 1, 2012, to December 31, 2014. MEASURES: The first use of TAVR as indicated by a fee-for-service Medicare claim. Covariates including characteristics of the physician groups (ie, case volume, hospital affiliation, mean patient risk) as well as county-level and market-level characteristics. RESULTS: By the close of 2014, 9.3% of practices had adopted TAVR. Cox proportional hazards models revealed a hazard ratio of 1.26 (95% confidence interval: 1.16-1.37, P<0.001) per 1000 point increase in the physician group practice Herfindahl-Hirschman Index, indicating each 1000 point increase in group practice Herfindahl-Hirschman Index was associated with a 26% relative increase in the rate of TAVR adoption. CONCLUSIONS: Adoption of TAVR by physician groups in concentrated markets was potentially a consequence of the unique regulations governing TAVR reimbursement, which favored the adoption of TAVR by physician groups with greater market power. These findings have important implications for how future regulations may shape patterns of technology adoption.

Decreasing utilization and increasing prices of brand-name oral contraceptive pills: Implications to societal costs and market competition.

The affordability of pharmaceuticals has been a major challenge in US health care. Generic substitution has been proposed as an important tool to reduce the costs, yet little is known how the prices of more expensive brand-name drugs would be affected by an increased utilization of generics. We aimed to examine the trend of overall utilization and the total costs of brand-name oral contraceptive pills (OCPs), the most widely used form of contraception, and its association with the pharmaceutical market concentration among the OCPs. Data from the Medical Expenditure Panel Survey (MEPS) 2011-2014, a nationally representative survey of healthcare utilization, were extracted on the utilization of generic and brand-name OCPs. A multiple logit regression analysis was conducted to assess the trend in utilization of brand-name OCPs over time. Total costs, including the costs to the payers and consumers, were synthesized. The Herfindahl-Hirschman Index (HHI), an index describing market concentration, was constructed, and a multiple regression analysis was conducted to evaluate the association between the brand-name OCP prices and the market share of individual brand-name drugs. The odds of utilizing brand-name drugs decreased steadily in 2012, 2013, and 2014 compared to 2012 (AOR 0.87, 0.73, 0.55, respectively, p<0.05) controlling for patient mix. Despite significant decline in total utilization, there was a 90% increase in the price of brand-name OCPs, resulting an 18% increase in revenue from 2011 to 2014 for the industry. During this time, pharmaceutical market concentration for OCPs increased (HHI increased from 1105 in 2011 to 2415 in 2014). Each percentage point increase in the market share by a brand-name OCPs was associated with a $3.12 increase in its price. Market mechanisms matter. Practitioners and policy makers need to take market mechanisms into account in order to realize the benefits of generic substitutions.

An empirical analysis of hospital ED pricing power.

OBJECTIVES: Empirical evaluation of market power that hospitals gain over health plans through hospitals' ability to cancel their contracts with plans while keeping large shares of plans' emergency patients and getting paid for them at above-market rates. STUDY DESIGN: Case-study analysis of 5 California hospitals that initially had contracts with most commercial health plans and then cancelled all those contracts at the same time. METHODS: We conducted a before-and-after case-study analysis comparing volume, price, and net revenues for the 5 study hospitals 3 years before and up to 4 years after the cancellation of their commercial contracts. The volume and price trends in study hospitals were compared with data on control hospitals in the same geographic area over the matching study period. RESULTS: Despite substantially increasing their prices on a noncontracted basis, the 5 study hospitals collectively retained 50% of their commercial health plan volume in first 2 years after the cancellation and 41% of their commercial volume in years 3 and 4, with net commercial revenues increasing as a result. At the same time, the simulated costs of treating the patients from out-of-network hospitals more than doubled for the health plans. CONCLUSIONS: In hospital-payer negotiation, many hospitals have an upper hand: Their threat to retain large portions of their emergency patients and revenues after becoming out of network is credible and it imposes disproportionate costs on the payers, which partially explains the continuing rise in hospital prices.

Provider Practice Competition and Adoption of Medicare's Oncology Care Model.

BACKGROUND: There is a concern that the Oncology Care Model (OCM), a voluntary bundled payment program, may incentivize mergers and acquisitions among physician practices leading to reduced competition and price increases. These concerns are heightened if OCM is preferentially adopted in competitive health care markets because it could result in reduced competition, but little is known about the characteristics of markets where OCM is adopted. OBJECTIVE: To measure the association between regional market competition among medical oncologists with the initial adoption of OCM. RESEARCH DESIGN: The Herfindahl-Hirschman Index (HHI), a measure of competition, was calculated for hospital referral regions (HRRs) using secondary data from the Centers for Medicare and Medicaid Services. The relationship between HHI and OCM adoption was assessed using a 2-part regression model adjusting for the market-level number of practices, physician density, average practice size, sociodemographic characteristics, and medical resources. A count model on all HRRs was also estimated to assess an overall effect. SUBJECTS: A total of 10,788 physicians in 3,537 practices who billed Medicare for oncology services in 2015. RESULTS: OCM was adopted in 114 (37%) of the 306 HRRs. We found that practices in competitive health care markets were more likely to adopt OCM than in noncompetitive markets. Two-part regression analysis indicated a nonlinear relationship between HHI and OCM adoption. Average practice size, number of practices in an HRR, and the hospital bed rate were positively associated with adoption, whereas the rate of full-time equivalent hospital employees to 1000 residents was negatively associated with adoption. CONCLUSIONS: OCM adoption was higher in HRRs with greater competition. Careful monitoring of market-level changes among OCM adopters should be undertaken to ensure that the benefits of the OCM outweigh the negative consequences of possible changes in competition.

Competition and health plan quality in the Medicare Advantage market.

OBJECTIVE: To examine the relationship between insurer market structure, health plan quality, and health insurance premiums in the Medicare Advantage (MA) program. DATA SOURCES/STUDY SETTING: Administrative data files from the Centers for Medicare and Medicaid Services, along with other secondary data sources. STUDY DESIGN: Trends in MA market concentration from 2008 to 2017 are presented, alongside logistic and linear regression models examining MA plan quality and premiums as a function of insurer market structure for 2011. DATA COLLECTION/EXTRACTION METHODS: Data are publicly available. PRINCIPAL FINDINGS: MA plans that tend to operate in more concentrated MA markets have a higher predicted probability of receiving a high-quality health plan rating. Operating in more concentrated MA markets was also found to be associated with higher premiums. Among plans that tend to operate in very concentrated MA markets, high-quality MA plans were associated with premiums as much as two times higher than premiums associated with lower-quality plans. CONCLUSIONS: Any policies directed at enhancing insurer competition should consider implications for health plan quality, which may be very different than the implications for enrollee premiums.

Dynamic hospital competition under rationing by waiting times.

We develop a dynamic model of hospital competition where (i) waiting times increase if demand exceeds supply; (ii) patients choose a hospital based in part on waiting times; and (iii) hospitals incur waiting time penalties. We show that, whereas policies based on penalties will lead to lower waiting times, policies that promote patient choice will instead lead to higher waiting times. These results are robust to different game-theoretic solution concepts, designs of the hospital penalty structure, and patient utility specifications. Furthermore, waiting time penalties are likely to be more effective in reducing waiting times if they are designed with a linear penalty structure, but the counterproductive effect of patient choice policies is smaller when penalties are convex. These conclusions are partly derived by calibration of our model based on waiting times and elasticities observed in the English NHS for a common treatment (cataract surgery).

Competition and physician behaviour: Does the competitive environment affect the propensity to issue sickness certificates?

Competition among physicians is widespread, but compelling empirical evidence on its impact on service provision is limited, mainly due to endogeneity issues. In this paper we exploit that many GPs, in addition to own practice, work in local emergency centres, where the matching of patients to GPs is random. The same GP is observed both with competition (own practice) and without (emergency centre). Using high-dimensional fixed-effect models, we find that GPs with a fee-for-service (fixed-salary) contract are 12 (8) percentage points more likely to certify sick leave at own practice than at the emergency centre. Thus, competition has a positive impact on GPs' sicklisting that is strongly reinforced by financial incentives.

Hospitals accreditation status in Indonesia: associated with hospital characteristics, market competition intensity, and hospital performance?

BACKGROUND: Hospital accreditation is widely adopted as a visible measure of an organisation's quality and safety management standards compliance. There is still inconsistent evidence regarding the influence of hospital accreditation on hospital performance, with limited studies in developing countries. This study aims to explore the association of hospital characteristics and market competition with hospital accreditation status and to investigate whether accreditation status differentiate hospital performance. METHODS: East Java Province, with a total 346 hospitals was selected for this study. Hospital characteristics (size, specialty, ownership) and performance indicator (bed occupancy rate, turnover interval, average length of stay, gross mortality rate, and net mortality rate) were retrieved from national hospital database while hospital accreditation status were recorded based on hospital accreditation report. Market density, Herfindahl-Hirschman index (HHI), and hospitals relative size as competition indicators were calculated based on the provincial statistical report data. Logistic regression, Mann-Whitney U-test, and one sample t-test were used to analyse the data. RESULTS: A total of 217 (62.7%) hospitals were accredited. Hospital size and ownership were significantly associated with of accreditation status. When compared to government-owned, hospital managed by ministry of defense (B = 1.705, p = 0.012) has higher probability to be accredited. Though not statistically significant, accredited hospitals had higher utility and efficiency indicators, as well as higher mortality. CONCLUSIONS: Hospital with higher size and managed by government have higher probability to be accredited independent to its specialty and the intensity of market competition. Higher utility and mortality in accredited hospitals needs further investigation.

An Analysis of Follow-On Development in New Drug Classes, January 1986-June 2018.

Follow-on drugs-new medicines approved within an established drug class-provide incremental treatment improvements, additional choices for clinicians and patients, and potential price competition. We examine the timing, quantity, and product characteristics of within-class drug approvals for new drug classes approved by the US Food and Drug Administration since January 1986. We find that nearly two-thirds of first-in-class drugs do not face a subsequent follow-on product. Follow-on innovation within a drug class was more common and occurred more rapidly in the 1990s than during the 2000s. We also find that fewer drug classes have multiple competitors entering the market during the 2000s. First-in-class drugs treating rare disorders experienced lower rates of follow-on entry than drugs treating common medical conditions. The decreased pace of follow-on development likely results from greater industry focus on rare diseases and increasing reimbursement pressure on products lacking clear advantages over existing products.

Do health insurance and hospital market concentration influence hospital patients' experience of care?

OBJECTIVE: To examine the effects of insurance and hospital market concentration on hospital patients' experience of care, as hospitals may compete on quality for favorable insurance contracts. DATA SOURCES/STUDY SETTING: Secondary data for 2008-2015 on patient experience from Hospital Compare's patient survey data, hospital characteristics from the American Hospital Association (AHA) Annual Survey, and insurance market characteristics from HealthLeaders-InterStudy. STUDY DESIGN: Hospital/year-level regressions predict each hospital's patient experience measure as a function of insurance and hospital market concentration and hospital fixed effects. The model is identified by longitudinal variation in insurance and hospital concentration. DATA COLLECTION/EXTRACTION METHODS: Hospital/year-level data from Hospital Compare and the AHA merged by market/year to insurance and hospital concentration measures. PRINCIPAL FINDINGS: Changes in patient satisfaction are positively associated with increases in insurance concentration and negatively associated with increases in hospital concentration. Moving from a market with 20th percentile insurance concentration and 80th percentile hospital concentration to a market with 80th percentile insurance concentration and 20th percentile hospital concentration increases the share of patients that rated the hospital highly from 66.9 percent (95% CI: 66.5-67.2 percent) to 67.9 percent (95% CI: 67.5-68.3 percent) and the share of patients that definitely recommend the hospital from 69.7 percent (95% CI: 69.4-70.0 percent) to 70.8 percent (95% CI: 70.5-71.2 percent). The relationship for insurance concentration is stronger in more concentrated hospital markets, while the relationship for hospital concentration is stronger in less concentrated hospital markets. CONCLUSIONS: These findings add to the evidence on the harms of hospital consolidation but suggest that insurer consolidation may improve patient experience.

Inter-brand competition in the convenience store industry, store density and healthcare utilization.

We investigate the impact of access to convenience stores and competition between convenience store chains on the use of medical care in Taiwan. Using insurance claims from 0.85 million individuals and administrative data on store sales, we find that greater store density and more inter-brand competition reduced expenditures on outpatient medical services and prescription drugs. In support of these findings, we demonstrate that convenience store competition was associated with greater consumption of healthy foods and lower obesity rates. Our estimates suggest that the rise in convenience store competition from 2002 to 2012 reduced outpatient expenditures in Taiwan by 0.44 percent and prescription drug expenditures by 0.85 percent.

Entry regulation and the effect of public reporting: Evidence from Home Health Compare.

Economic theory suggests that competition and information are complementary tools for promoting health care quality. The existing empirical literature has documented this effect only in the context of competition among existing firms. Extending this literature, we examine competition driven by the entry of new firms into the home health care industry. In particular, we use the certificate of need (CON) law as a proxy for the entry of firms to avoid potential endogeneity of entry. We find that home health agencies in non-CON states improved quality under public reporting significantly more than agencies in CON states. Because home health care is a labor-intensive and capital-light industry, the state CON law is a major barrier for new firms to enter. Our findings suggest that policymakers may jointly consider information disclosure and entry regulation to achieve better quality in home health care.

The Effects of Chains on the Measurement of Competition in the Nursing Home Industry.

Consistently accounting for more than 50% of the nursing homes in the United States, corporate chains have played an important role in the industry for several decades. However, few studies have explicitly considered the role of chains in measuring competition in nursing home markets. In this study, we use a newly developed database tracking common ownership over a period of nearly two decades to compare chain-adjusted and unadjusted measures of competition at the county and 25 km fixed-radius levels and explore how the differences would affect the assessment of local market structure. On average, the chain-adjusted Herfindahl-Hirschman Indexes (HHIs) are about 0.02 higher than the unadjusted HHIs. Each year, about 20% to 22% of the counties would appear more concentrated when recalculating HHIs accounting for common ownership. Evidence suggests that nursing home chains tend to focus more on expanding access to new markets within a state than to increasing market power within a smaller local market.

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.

Market Power: Price Variation Among Commercial Insurers For Hospital Services.

Much research has focused on differences in hospital prices paid by private (commercial) versus public (Medicare and Medicaid) health insurers. Far less is known about price differences across commercial payers-health maintenance organizations (HMOs) or preferred provider organizations (PPOs) versus other payers, such as casualty (automobile), workers' compensation, and travel insurers. We found that other insurers had far less negotiating power with hospitals than commercial HMO/PPO insurers did. In the period 2010-16, the median price paid by HMO/PPO insurers for hospital services in Florida increased from 1.9 times to 2.5 times the Medicare price, respectively, while the median price paid by other insurers increased from 2.8 times to 3.8 times the Medicare price. Commercial HMO/PPO insurers' prices were similar across major hospital systems, regardless of ownership, while other insurers' prices differed substantially across systems. In 2016 the twenty hospitals with the highest prices (7.8-14.1 times the Medicare rate) for other insurers in Florida were all affiliated with the Hospital Corporation of America. These hospitals generated 24 percent of their commercial net revenue (median) from other payers, despite treating a relatively small proportion of patients covered by these payers. Protecting patients with other insurance from high hospital prices requires efforts by policy makers, hospitals, and insurers.