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Hospital Competition, Managed Care and Mortality After Hospitalization for Medical Conditions: Evidence From Three States

  • José J. Escarce
  • Arvind K. Jain
  • Jeannette Rogowski
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    This study assessed the effect of hospital competition and HMO penetration on mortality after hospitalization for six medical conditions in California, New York, and Wisconsin. We used linked hospital discharge and vital statistics data to study adults hospitalized for myocardial infarction, hip fracture, stroke, gastrointestinal hemorrhage, congestive heart failure, or diabetes. We estimated logistic regression models with death within 30 days of admission as the dependent variable and hospital competition, HMO penetration, and hospital and patient characteristics as explanatory variables. Higher hospital competition was associated with lower mortality in California and New York, but not Wisconsin. In addition, higher HMO penetration was associated with lower mortality in California, but higher mortality in New York. In the context of the study states%u2019 history with managed care, these findings suggest that hospitals in highly competitive markets compete on quality even in the absence of mature managed care markets. The findings also underscore the need to consider geographic effects in studies of market structure and hospital quality.

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    File URL: http://www.nber.org/papers/w12335.pdf
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    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 12335.

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    Date of creation: Jun 2006
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    Publication status: published as Escarce, Jose J., Arvind K. Jain, and Jeannette Rogowski. "Hospital Competition, Managed Care and Mortality After Hospitalization for Medical Conditions: Evidence From Three States." Medical Care Research and Review 63, 6 suppl (2006): 112S-140S.
    Handle: RePEc:nbr:nberwo:12335
    Note: HC
    Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
    Phone: 617-868-3900
    Web page: http://www.nber.org
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    1. Laurence C. Baker & Ciaran S. Phibbs, 2002. "Managed Care, Technology Adoption, and Health Care: The Adoption of Neonatal Intensive Care," RAND Journal of Economics, The RAND Corporation, vol. 33(3), pages 524-548, Autumn.
    2. Keeler, Emmett B. & Melnick, Glenn & Zwanziger, Jack, 1999. "The changing effects of competition on non-profit and for-profit hospital pricing behavior," Journal of Health Economics, Elsevier, vol. 18(1), pages 69-86, January.
    3. Melnick, Glenn A. & Zwanziger, Jack & Bamezai, Anil & Pattison, Robert, 1992. "The effects of market structure and bargaining position on hospital prices," Journal of Health Economics, Elsevier, vol. 11(3), pages 217-233, October.
    4. Zwanziger, Jack & Melnick, Glenn A., 1988. "The effects of hospital competition and the Medicare PPS program on hospital cost behavior in California," Journal of Health Economics, Elsevier, vol. 7(4), pages 301-320, December.
    5. Shen, Yu-Chu, 2003. "The effect of financial pressure on the quality of care in hospitals," Journal of Health Economics, Elsevier, vol. 22(2), pages 243-269, March.
    6. Feldman, Roger & Chan, Hung-Ching & Kralewski, John & Dowd, Bryan & Shapiro, Janet, 1990. "Effects of HMOs on the creation of competitive markets for hospital services," Journal of Health Economics, Elsevier, vol. 9(2), pages 207-222, September.
    7. Nazmi Sari, 2002. "Do competition and managed care improve quality?," Health Economics, John Wiley & Sons, Ltd., vol. 11(7), pages 571-584.
    8. Patrick S. Romano & Ryan Mutter, 2004. "The Evolving Science of Quality Measurement for Hospitals: Implications for Studies of Competition and Consolidation," International Journal of Health Care Finance and Economics, Springer, vol. 4(2), pages 131-157, 06.
    9. Robinson, James C. & Luft, Harold S., 1985. "The impact of hospital market structure on patient volume, average length of stay, and the cost of care," Journal of Health Economics, Elsevier, vol. 4(4), pages 333-356, December.
    10. Daniel P. Kessler & Mark B. McClellan, 2000. "Is Hospital Competition Socially Wasteful?," The Quarterly Journal of Economics, MIT Press, vol. 115(2), pages 577-615, May.
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