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Hospital and Health Insurance Markets Concentration and Inpatient Hospital Transaction Prices in the U.S. Health Care Market.

ABSTRACT: OBJECTIVE:To examine the effects of hospital and insurer markets concentration on transaction prices for inpatient hospital services. DATA SOURCES:Measures of hospital and insurer markets concentration derived from American Hospital Association and HealthLeaders-InterStudy data are linked to 2005-2008 inpatient administrative data from Truven Health MarketScan Databases. STUDY DESIGN:Uses a reduced-form price equation, controlling for cost and demand shifters and accounting for possible endogeneity of market concentration using instrumental variables (IV) technique. PRINCIPAL FINDINGS:The findings suggest that greater hospital concentration raises prices, whereas greater insurer concentration depresses prices. A hypothetical merger between two of five equally sized hospitals is estimated to increase hospital prices by about 9 percent (p < .001). A similar merger of insurers would depress prices by about 15.3 percent (p < .001). Over the 2003-2008 periods, the estimates imply that hospital consolidation likely raised prices by about 2.6 percent, while insurer consolidation depressed prices by about 10.8 percent. Additional analysis using longer panel data and applying hospital fixed effects confirms the impact of hospital concentration on prices. CONCLUSION:The findings provide support for strong antitrust enforcement to curb rising hospital service prices and health care costs.

SUBMITTER: Dauda S

PROVIDER: S-EPMC5867178 | biostudies-literature | 2018 Apr

REPOSITORIES: biostudies-literature

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Hospital and Health Insurance Markets Concentration and Inpatient Hospital Transaction Prices in the U.S. Health Care Market.

Dauda Seidu S

Health services research 20170511 2

<h4>Objective</h4>To examine the effects of hospital and insurer markets concentration on transaction prices for inpatient hospital services.<h4>Data sources</h4>Measures of hospital and insurer markets concentration derived from American Hospital Association and HealthLeaders-InterStudy data are linked to 2005-2008 inpatient administrative data from Truven Health MarketScan Databases.<h4>Study design</h4>Uses a reduced-form price equation, controlling for cost and demand shifters and accounting ...[more]

PMID: 28493481

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Project description:ImportanceHigh-volume hospital care for laryngectomy has been shown to be associated with reduced morbidity, mortality, and costs; however, most hospitals in the United States do not perform high volumes of laryngectomies. The influence of market competition on charges and costs for such patients has not been defined.ObjectiveTo examine the association between regional hospital market concentration, hospital charges, and costs for laryngectomy.Design, setting, and participantsThe Nationwide Inpatient Sample was used to identify 34 193 patients who underwent laryngectomy for a malignant laryngeal or hypopharyngeal neoplasm from January 1, 2003, to December 31, 2011. Hospital laryngectomy volume was modeled as a categorical variable. Hospital market concentration was evaluated using a variable-radius Herfindahl-Hirschman Index from the 2003, 2006, and 2009 Hospital Market Structure Files. Statistical analysis was performed from May 19 to August 15, 2018.Main outcomes and measuresMultivariable generalized linear regression was used to evaluate associations between market concentration and total charges and costs for laryngectomy.ResultsAmong the 34 193 patients (19.3% female and 80.7% male; mean age, 62.7 years [range, 20.0-96.0 years]), 69.2% of procedures were performed at hospitals in highly concentrated (noncompetitive) markets and 26.2% were performed at hospitals in unconcentrated (highly competitive) markets. Most high-volume hospitals (68.0%) were located in highly concentrated markets, followed by unconcentrated markets (32.0%). Market share and volume were not associated with significant differences in total charges. Unconcentrated markets were associated with 28% higher costs (95% CI, 8%-53%) relative to moderately concentrated and highly concentrated markets. High-volume hospitals were associated with 22% lower costs (95% CI, -36% to -5%).Conclusions and relevanceCompetition among hospitals is associated with increased costs of care for laryngectomy. High-volume hospital care is associated with lower costs of care. These data suggest that hospital market consolidation of laryngectomy at centers able to meet minimum volume thresholds may improve health care value.

Dataset Information

Hospital and Health Insurance Markets Concentration and Inpatient Hospital Transaction Prices in the U.S. Health Care Market.

Publications

Hospital and Health Insurance Markets Concentration and Inpatient Hospital Transaction Prices in the U.S. Health Care Market.

Similar Datasets

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