The effects of price competition and reduced subsidies for uncompensated care on hospital mortality.
OBJECTIVE
To determine whether hospital mortality rates changed in New Jersey after implementation of a law that changed hospital payment from a regulated system based on hospital cost to price competition with reduced subsidies for uncompensated care and whether changes in mortality rates were affected by hospital market conditions.


METHODS
State discharge data for New Jersey and New York from 1990 to 1996. Study Design. We used an interrupted time series design to compare risk-adjusted in-hospital mortality rates between states over time. We compared the effect sizes in markets with different levels of health maintenance organization penetration and hospital market concentration and tested the sensitivity of our results to different approaches to defining hospital markets.


METHODS
The study sample included all patients under age 65 admitted to New Jersey or New York hospitals with stroke, hip fracture, pneumonia, pulmonary embolism, congestive heart failure, hip fracture, or acute myocardial infarction (AMI).


RESULTS
Mortality among patients in New Jersey improved less than in New York by 0.4 percentage points among the insured (p=.07) and 0.5 percentage points among the uninsured (p=.37). There was a relative increase in mortality for patients with AMI, congestive heart failure, and stroke, especially for uninsured patients with these conditions, but not for patients with the other four conditions we studied. Less competitive hospital markets were significantly associated with a relative decrease in mortality among insured patients.


CONCLUSIONS
Market-based reforms may adversely affect mortality for some conditions but it appears the effects are not universal. Insured patients in less competitive markets fared better in the transition to price competition.
Volpp
Kevin G M
KG
Center for Health Equity Research and Promotion, Philadelphia Veterans Affairs Medical Center, PA 19104, USA.
Ketcham
Jonathan D
JD
Epstein
Andrew J
AJ
Williams
Sankey V
SV
D000328:Adult; D004465:Economic Competition; D018166:Health Care Reform / Q000191:economics*; D019981:Health Care Sector; D017052:Hospital Mortality / Q000639:trends; D006801:Humans; D019458:Insurance Coverage; D016014:Linear Models; D008875:Middle Aged; D009515:New Jersey / Q000453:epidemiology; D009518:New York / Q000453:epidemiology; D011787:Quality of Health Care; D020379:Risk Adjustment; D017664:Uncompensated Care / Q000191:economics*