Hospital Markets and the Effect of Competition on Quality
AbstractThis paper investigates the effects of competition on hospital quality. It proposes to extend the Elzinga-Hogarty quantity flow approach of defining markets by first determining the trading cluster to which each hospital belongs and then delineating markets using patient flow information. After defining hospital markets and computing measures of competition, this paper examines the effect of competition on hospital quality using hospital administration data from the state of Victoria, Australia. We approximate quality using two indicators, namely mortality within 30 days of discharge and unplanned readmission within 28 days of discharge. For each quality indicator, a random intercept logit model is estimated. Two main findings are reported. First, the boundaries of markets and hence the degree of competition depend on the nature of the medical services provided. Second, competition is found to have a mixed effect on quality of hospital care–increasing the number of private hospitals appears to lower quality, while increasing the number of public hospitals has the opposite effect. The intensity of competition, on the other hand, does not appear to have a statistically significant effect on quality.
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Bibliographic InfoPaper provided by Melbourne Institute of Applied Economic and Social Research, The University of Melbourne in its series Melbourne Institute Working Paper Series with number wp2009n17.
Length: 27 pages
Date of creation: Jun 2009
Date of revision:
Contact details of provider:
Postal: Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Victoria 3010 Australia
Phone: +61 3 8344 2100
Fax: +61 3 8344 2111
Web page: http://www.melbourneinstitute.com/
More information through EDIRC
Hospital markets; Elzinga-Hogarty; Hospital competition; Hospital Quality.;
Find related papers by JEL classification:
- I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-07-17 (All new papers)
- NEP-COM-2009-07-17 (Industrial Competition)
- NEP-HEA-2009-07-17 (Health Economics)
- NEP-IND-2009-07-17 (Industrial Organization)
- NEP-MIC-2009-07-17 (Microeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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