Working Paper: NBER ID: w12335
Authors: Jos 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' 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.
Keywords: hospital competition; HMO penetration; mortality; healthcare quality; managed care
JEL Codes: I1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Higher hospital competition (I11) | Lower mortality rates in California (I12) |
| Higher hospital competition (I11) | Lower mortality rates in New York (I12) |
| Higher hospital competition (I11) | No association with mortality in Wisconsin (I12) |
| HMO penetration (I11) | Lower mortality rates in California (I12) |
| HMO penetration (I11) | Higher mortality rates in New York (I12) |
| Hospital competition (L13) | Quality improvements in some contexts (L15) |