Incorporating health care quality into health antitrust law

<p>Abstract</p> <p>Background</p> <p>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.</p> <p>Methods</p> <p>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.</p> <p>Results</p> <p>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. Non-profit 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.</p> <p>Conclusion</p> <p>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.</p

Conditional versus Contingent Fees

Under contingent fees the attorney gets a share of the judgement; under conditional fees the lawyer gets an upscale premium if the case is won which is, however, unrelated to the adjudicated amount. We compare conditional and contingent fees in a framework where lawyers are uninformed about the clients’ cases. If there is asymmetric information about the merits of cases, in equilibrium attorneys will offer only conditional fees. If there is asymmetric information about the risk of cases, only contingent fee contracts are offered in equilibrium