Heterogeneous effects of hospital competition on inpatient expenses: an empirical analysis of diseases grouping basing on conditions’ complexity and urgency

Background Multiple pro-competition policies were implemented during the new round of healthcare reform in China. Differences in conditions’ complexity and urgency across diseases associating with various degrees of information asymmetry and choice autonomy in the process of care provision, would lead to heterogeneous effects of competition on healthcare expenses. However, there are limited studies to explore it. This study aims to examine the heterogeneous effects of hospital competition on inpatient expenses basing on disease grouping according to conditions’ complexity and urgency. Methods Collecting information from discharge data of inpatients and hospital administrative data of Sichuan province in China, we selected representative diseases. K-means clustering was used to group the selected diseases and Herfindahl-Hirschman Index (HHI) was calculated based on the predicted patient flow to measure the hospital competition. The log-linear multivariate regression model was used to examine the heterogeneous effects of hospital competition on inpatient expenses. Results We selected 19 representative diseases with significant burdens (more than 1.1 million hospitalizations). The selected diseases were divided into three groups, including diseases with highly complex conditions, diseases with urgent conditions, and diseases with less complex and less urgent conditions. For diseases with highly complex conditions and diseases with urgent conditions, the estimated coefficients of HHI are mixed in the direction and statistical significance in the identical regression model at the 5% level. For diseases with less complex and less urgent conditions, the coefficients of HHI are all positive, and almost all of them significant at the 5% level. Conclusions We found heterogeneous effects of hospital competition on inpatient expenses across disease groups: hospital competition does not play an ideal role in reducing inpatient expenses for diseases with highly complex conditions and diseases with urgent conditions, but it has a significant effect in reducing inpatient expenses of diseases with less complex and less urgent conditions. Our study offers implications that the differences in condition’s complexity and urgency among diseases would lead to different impacts of hospital competition, which would be given full consideration when designing the pro-competition policy in the healthcare delivery system to achieve the desired goal.

Strategic Planning IS/IT TO Improve Business Competitiveness in Public Hospital

Hospital competition is getting tighter, making good hospital strategic planning very important so that the Hospital can survive to develop better in a changing environment. Today's competitive advantage cannot be separated from Information Systems (IS) and Information Technology (IT). IS / IT in hospitals is currently used as a tool to create and develop innovative products, systems, and services for hospitals. The problem that occurs today is a large number of IS / IT that is made without looking at the financial side of the Hospital, thus making a number of uses of IS / IT not optimal in Hospital operational and business activities. Based on these problems, IS / IT strategic planning that also considers financial capability is needed. In this research, IS/IT strategic planning that takes into account the financial aspects is achieved using the approach of Ward and Peppard combined with Cost-Benefit Analysis. Value Chain and Critical Success Factor (CSF) analysis methods are used to analyze the current internal condition of the Hospital. Meanwhile, PEST and Porter's Five Forces analysis used external business analysis of the Hospital. The results of this study are in the form of IS business strategy recommendations, IS/IT management strategies, IT strategies, IS application portfolios, and IS/IT investment roadmaps compiled based on costs and benefits. There are 25 IS strategy recommendations, the IT strategy recommends 14 proposals to support the IS strategy based on the cost-benefit, and the IS / IT management strategy recommendations consist of 16 suggestions to support the IS strategy and IT strategy.

Hospital competition, quality, and cost of prostate cancer care.

235 Background: Hospital competition is important for addressing the disparity in quality and cost of prostate cancer care. Study objective was to examine the association of hospital competition with process of care (time to treatment, treatment and overuse) and outcomes (medial care use, complications, mortality and cost) in Medicare fee-for-service beneficiaries with prostate cancer. Methods: This was a population-based cohort study of Surveillance, Epidemiological, and End Results-Medicare (SEER-Medicare) data from 1995- 2016, linked with American Medical Association for physician data and American Hospital Association for hospital level data. Eligible patients were men 66 years or older with localized or advanced stage prostate cancer at diagnosis. The Hirschman-Herfindahl index (HHI) was computed for all serving hospitals based on number of competitors, i.e., number of hospitals situated within the hospital referral region(HRR). The Overuse Index (OI) was used to composite measure of overuse during treatment (one year after diagnosis) and follow-up care phase. Outcomes were overall and prostate cancer-specific survival, complications, readmissions, ER visits, and cost. We used survival analysis, including competing risk analysis, Poisson (zero inflated) models for count data, and GLM (log-link) models for cost data. Propensity score and instrumental variable approaches were used to minimize potential biases. Results: In our study cohort of 434,264, 85% of patients had localized disease stage, and 15% had advanced stage. For both localized and advanced stage groups, age, race and ethnicity, geographic region, comorbidity, socio-economic status, and primary treatment differed by hospital competition (high competition vs. low competition). Hospitals within high competition area were more likely to perform surgery, whereas hospitals within low competition area were more likely to perform radiation therapy. Among localized disease patients, low hospital competition was associated with higher hazard of overall mortality (HR = 1.08, 95% CI = 1.07 - 1.10) and prostate cancer-specific mortality (HR = 1.13, 95% CI = 1.09 - 1.17) and higher odds of ER visits (OR = 1.13, 95% CI = 1.11 - 1.15). For advanced stage patients, low hospital competition was associated with higher hazard of overall mortality (HR = 1.11, 95% CI = 1.08 - 1.15) and prostate cancer-specific death (HR = 1.15, 95% CI = 1.09 - 1.18) and higher odds of ER visits (OR = 1.16, 95% CI = 1.11 - 1.22). Higher scores of the OI were associated with higher total medical costs per capita per year, and not associated with overall mortality. Conclusions: This novel study showed that higher hospital competition is associated with improved quality of care (reduced mortality, complications and ER visits) and increased/lower direct medical care cost among patients with localized or advanced stage prostate cancer. Policy measures should be implemented to improve hospital competition.

Countervailing Market Power and Hospital Competition

While economic theories indicate that market power by downstream firms can potentially counteract market power upstream, antitrust policy is opaque about whether to incorporate countervailing market power in merger analyses. We use detailed national claims data from the healthcare sector to evaluate whether countervailing insurer power does indeed limit hospitals' exercise of market power. We estimate willingness-to-pay models to evaluate hospital market power across analysis areas. We find that countervailing market power is important: a typical hospital merger would raise hospital prices 4.3% at the 25th percentile of insurer concentration but only 0.97% at the 75th percentile of insurer concentration.