Hospital competition, resource allocation and quality of care

BACKGROUND: A variety of approaches have been used to contain escalating hospital costs. One approach is intensifying price competition. The increase in price based competition, which changes the incentives hospitals face, coupled with the fact that consumers can more easily evaluate the quality of hotel services compared with the quality of clinical care, may lead hospitals to allocate more resources into hotel rather than clinical services. METHODS: To test this hypothesis we studied hospitals in California in 1982 and 1989, comparing resource allocations prior to and following selective contracting, a period during which the focus of competition changed from quality to price. We estimated the relationship between clinical outcomes, measured as risk-adjusted-mortality rates, and resources. RESULTS: In 1989, higher competition was associated with lower clinical expenditures levels compared with 1982. The trend was stronger for non-profit hospitals. Lower clinical resource use was associated with worse risk adjusted mortality outcomes. CONCLUSIONS: This study raises concerns that cost reductions may be associated with increased mortality

Equity in access to MRI equipment: the Portuguese case

Magnetic resonance imaging (MRI) is a method of image diagnose proven to be of undeniable importance when it comes to neuro and cardio related diseases. In fact, these diseases (such as: ischemic heart disease, stroke and acute myocardial infection) have high incidence in Portugal. For these reasons, the allocation of this medical technology should not be considered with light thoughts. In fact, making decision of resource allocation in health care can be a very complex and contested matter. The impacts of new technology allocation, such MRI, can be assessed in a variety of ways. However, a fundamental component should always be present: the use of evidence-based decision-making methods. One of these methods is Technology Assessment (TA). This paper aims to characterize the equity on access of the Portuguese population in general, to a specific medical device such as MRI, under the TA point of view. It is hoped to promote a bridge of scientific knowledge between the gap on research and policy-making through TA that can emerge as a tool to aid decision-makers in the organization of health systems. There are gaps in providing healthcare, due to geographical imbalances, with some areas unable to provide certain specialized services, as hospitals in the countryside do not provide all medical specialties. Portugal has also a large independent private sector that provides diagnostic and therapeutic services to NHS users under contracts called conventions. These medical contracts cover ambulatory health facilities for laboratory tests and examinations such as diagnostic tests and Radiology. However, there is no convention from the NHS when concerning the MRI exam. Therefore, this reality can be considered a limitation in the access of the general population to this kind of clinical exam. TA can play an useful and important role in helping the decision-makers to explore potential gains that might be achieved by introducing a more rational decision making into health care management, namely into the Radiology area, regarding the allocation of MRI equipment.Orientadores: António Brandão Moniz (FCT-UNL) e Michael Decker (ITAS-KIT

The relationship between safety net activities and hospital financial performance

<p>Abstract</p> <p>Background</p> <p>During the 1990's hospitals in the U.S were faced with cost containment charges, which may have disproportionately impacted hospitals that serve poor patients. The purposes of this paper are to study the impact of safety net activities on total profit margins and operating expenditures, and to trace these relationships over the 1990s for all U.S urban hospitals, controlling for hospital and market characteristics.</p> <p>Methods</p> <p>The primary data source used for this analysis is the Annual Survey of Hospitals from the American Hospital Association and Medicare Hospital Cost Reports for years 1990-1999. Ordinary least square, hospital fixed effects, and two-stage least square analyses were performed for years 1990-1999. Logged total profit margin and operating expenditure were the dependent variables. The safety net activities are the socioeconomic status of the population in the hospital serving area, and Medicaid intensity. In some specifications, we also included uncompensated care burden.</p> <p>Results</p> <p>We found little evidence of negative effects of safety net activities on total margin. However, hospitals serving a low socioeconomic population had lower expenditure raising concerns for the quality of the services provided.</p> <p>Conclusions</p> <p>Despite potentially negative policy and market changes during the 1990s, safety net activities do not appear to have imperiled the survival of hospitals. There may, however, be concerns about the long-term quality of the services for hospitals serving low socioeconomic population.</p

Physician Fees and Managed Care Plans

One of the objectives of managed care organizations (MCOs) has been to reduce the rate of growth of health care expenditures, including that of physician fees. Yet, due to a lack of data, no one has been able to determine whether MCOs have been successful in encouraging the growth of price competition in the market for physician services in order to slow the growth in physician fees. This study uses a unique, national-level data set to determine what factors influenced the physician fees that MCOs negotiated during the 1990–92 period. The most influential characteristics were physician supply and managed care penetration, which suggest that the introduction of competition into the health care market was an effective force in reducing physician fees

Has Price Competition Changed Hospital Revenues and Expenses in New York?

This study analyzes the factors that influenced hospital expenses and revenues prior to and following the enactment of the New York State Health Care Reform Act of 1996 (HCRA)—the period from 1994–1999. HCRA was expected to encourage price competition which in turn was anticipated to lower hospital revenues and expenses. We measured the differential effects on hospital revenues and expenses in markets with varying degrees of competition. We also measured the relationship between hospital revenues and expenses and the increased concentration resulting from the formation of local hospital systems. We found that revenues and expenses both grew more slowly for hospitals located in more competitive markets; hospital systems that increased concentration tended to have higher revenues. In the short run at least, price competition induced by HCRA did constrain both hospital expense and revenue growth, although the increase in hospital mergers countered this trend

Has Competition Lowered Hospital Prices?

On Jan. 1, 1997, New York ended its regulation of hospital prices with the intent of using competitive markets to control prices and increase efficiency. This paper uses data that come from annual reports filed by all health maintenance organizations (HMOs) operating in New York and include payments to and usage in the major hospitals in an HMO's network. We estimate the relationship between implied prices and hospital, plan, and market characteristics. The models show that after 1997, hospitals in more competitive markets paid less. Partially offsetting these price reductions were price increases associated with hospital mergers that reduced the competitiveness of the local market. Hospital deregulation was successful, at least in the short run, in using price competition to reduce hospital payments; it is unclear whether this success will be undermined by the structural changes taking place in the hospital industry