The changing effects of competition on non-profit and for-profit hospital pricing behavior.
Has the nature of hospital competition changed from a medical arms race in which hospitals compete for patients by offering their doctors high quality services to a price war for the patients of payors? This paper uses time-series cross-sectional methods on California hospital discharge data from 1986-1994 to show the association of hospital prices with measures of market concentration changed steadily over this period, with prices now higher in less competitive areas, even for non-profit hospitals. Regression results are used to simulate the price impact of hypothetical hospital mergers.
Keeler
E B
EB
RAND, Santa Monica, CA 90407, USA. emmett@rand.org
Melnick
G
G
Zwanziger
J
J
D002140:California; D002391:Catchment Area, Health / Q000191:economics / Q000706:statistics & numerical data; D003953:Diagnosis-Related Groups; D004465:Economic Competition / Q000639:trends*; D019981:Health Care Sector / Q000706:statistics & numerical data / Q000639:trends*; D006273:Health Facility Merger / Q000191:economics*; D006302:Health Services Research / Q000379:methods; D017722:Hospital Charges / Q000706:statistics & numerical data / Q000639:trends*; D006760:Hospitalization / Q000191:economics; D006777:Hospitals, Proprietary / Q000191:economics*; D006779:Hospitals, Public / Q000191:economics; D006788:Hospitals, Voluntary / Q000191:economics*; D008484:Medicaid; D006278:Medicare; D010067:Ownership / Q000191:economics; D012044:Regression Analysis; D014481:United States