Abstract
This study investigated the association of market competition with hospital charges, length of stay, and quality outcomes. A total of 279,847 patients from 851 hospitals were analyzed. The Herfindahl-Hirschman Index was used as a measure of hospital market competition level. Our results suggest that hospitals in less competitive markets charged more on charge per admission, possibly by increasing the length of stays, however, hospitals in more competitive markets charged more for daily services by providing more intensive services while reducing the length of stays, thereby reducing the overall charge per admission. Quality outcomes measured by mortality within 30 days of admission and readmission within 30 days of discharge were better for surgical procedures within competitive areas. Continued government monitoring of hospital response to market competition level is recommended in order to determine whether changes in hospitals’ strategies influence the long-term outcomes of services performance and health care spending.
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