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    incorporating Health Care Quality into Health Antitrust Law

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    2008_04_Schneider.pdf (304.2Kb)
    Date
    2008-04
    Author
    Schneider, Helen
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    Abstract
    Antitrust authorities treat price as a proxy for hospital quality since health care quality is difficult to observe. As the ability to measure quality improved, more research became necessary to investigate the relationship between hospital market power and patient outcomes. This paper examines the impact of hospital competition on the quality of care as measured by the risk-adjusted mortality rates with the hospital as the unit of analysis. The study separately examines the effect of competition on non-profit hospitals. Methods: We use California Office of Statewide Health Planning and Development (OSHPD) data from 1997 through 2002. Empirical model is a cross-sectional study of 373 hospitals. Regression analysis is used to estimate the relationship between Coronary Artery Bypass Graft (CABG) risk-adjusted mortality rates and hospital competition. Results: Regression results show lower risk-adjusted mortality rates in the presence of a more competitive environment. This result holds for all alternative hospital market definitions. Nonprofit hospitals do not have better patient outcomes than investor-owned hospitals. However, they tend to provide better quality in less competitive environments. CABG volume did not have a significant effect on patient outcomes. Conclusion: Quality should be incorporated into the antitrust analysis. When mergers lead to higher prices and lower quality, thus lower social welfare, the antitrust challenge of hospital mergers is warranted. The impact of lower hospital competition on quality of care delivered by non-profit hospitals is ambiguous.
    Department
    Economics
    Subject
    adjusted hospital mortality
    bypass graft-surgery
    market share
    of-care
    competition
    volume
    consolidation
    nonprofit
    association
    behavior
    health care sciences & services
    URI
    http://hdl.handle.net/2152/43364
    Citation
    Schneider, Helen. "Incorporating health care quality into health antitrust law." BMC health services research, Vol. 8, No. 1 (Apr., 2008): 1.
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    © The University of Texas at Austin