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

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  • José J. Escarce
  • Arvind K. Jain
  • Jeannette Rogowski

Abstract

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.

Suggested Citation

  • José J. Escarce & Arvind K. Jain & Jeannette Rogowski, 2006. "Hospital Competition, Managed Care and Mortality After Hospitalization for Medical Conditions: Evidence From Three States," NBER Working Papers 12335, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:12335
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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.
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    6. 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.
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    9. 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.
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    Cited by:

    1. repec:spr:eujhec:v:19:y:2018:i:1:d:10.1007_s10198-016-0862-6 is not listed on IDEAS
    2. Ho Vivian & Short Marah N. & Ku-Goto Meei-Hsiang, 2012. "Can Centralization of Cancer Surgery Improve Social Welfare?," Forum for Health Economics & Policy, De Gruyter, vol. 15(2), pages 1-25, October.
    3. Gaynor, Martin & Town, Robert J., 2011. "Competition in Health Care Markets," Handbook of Health Economics, Elsevier.
    4. Chen, Chi-Chen & Cheng, Shou-Hsia, 2010. "Hospital competition and patient-perceived quality of care: Evidence from a single-payer system in Taiwan," Health Policy, Elsevier, vol. 98(1), pages 65-73, November.
    5. Carrie Colla & Julie Bynum & Andrea Austin & Jonathan Skinner, 2016. "Hospital Competition, Quality, and Expenditures in the U.S. Medicare Population," NBER Working Papers 22826, National Bureau of Economic Research, Inc.
    6. H. Jiang & Bernard Friedman & Shenyi Jiang, 2013. "Hospital cost and quality performance in relation to market forces: an examination of U.S. community hospitals in the “post-managed care era”," International Journal of Health Economics and Management, Springer, vol. 13(1), pages 53-71, March.
    7. Alfons Palangkaraya & Jongsay Yong, 2013. "Effects of competition on hospital quality: an examination using hospital administrative data," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 14(3), pages 415-429, June.
    8. Chew Lian Chua & Alfons Palangkaraya & Jongsay Yong, 2011. "Hospital Competition, Technical Efficiency and Quality," The Economic Record, The Economic Society of Australia, vol. 87(277), pages 252-268, June.

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    JEL classification:

    • I1 - Health, Education, and Welfare - - Health

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