The Price Effect of Hospital Closures

Wu, Vivian Y.

doi:10.5034/inquiryjrnl_45.03.280

Cited by 7 publications

(4 citation statements)

References 32 publications

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“…We also excluded non‐SNHs with no SNHs in their market because non‐SNHs located far from a SNH and those located near SNHs are likely to have different characteristics. This type of close rival analysis is similar to other studies (Lindrooth, Lo Sasso, and Bazzoli ; Dafny ; Wu ) that found proximity to be an important determinant of hospital decisions. Therefore, a non‐SNH located near an SNH is a potential competitor, regardless of the types of services they provide or the types of patients they serve.…”

Section: Methodssupporting

confidence: 87%

Early Impact of the Affordable Care Act Coverage Expansion on Safety‐Net Hospital Inpatient Payer Mix and Market Shares

Fingar

Jiang

et al. 2018

Health Services Research

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Section: Methodssupporting

confidence: 87%

Early Impact of the Affordable Care Act Coverage Expansion on Safety‐Net Hospital Inpatient Payer Mix and Market Shares

Fingar

Jiang

et al. 2018

Health Services Research

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“…31,33 Wu found that 5 years after the closure of rival institutions, hospitals in the 1990s experienced, on average, a permanent price increase of 4%. 37 In addition, a multidecade study of heart disease patients found that interhospital competition was associated with lower expenditures after 1990, a period with a particularly high focus on managed care, but not before. 38 Other studies have suggested that in more recent years, the decline of the managed care environment has prompted hospitals to shift from price competition to nonprice competition strategies, like new technology or heightened amenities.…”

Section: Discussionmentioning

confidence: 99%

Interhospital competition and hospital charges and costs for patients undergoing cranial neurosurgery

Tang

Perla

Lim

et al. 2021

Journal of Neurosurgery

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OBJECTIVEResearch has documented significant growth in neurosurgical expenditures and practice consolidation. The authors evaluated the relationship between interhospital competition and inpatient charges or costs in patients undergoing cranial neurosurgery.METHODSThe authors identified all admissions in 2006 and 2009 from the National Inpatient Sample. Admissions were classified into 5 subspecialties: cerebrovascular, tumor, CSF diversion, neurotrauma, or functional. Hospital-specific interhospital competition levels were quantified using the Herfindahl-Hirschman Index (HHI), an economic metric ranging continuously from 0 (significant competition) to 1 (monopoly). Inpatient charges (hospital billing) were multiplied with reported cost-to-charge ratios to calculate costs (actual resource use). Multivariate regressions were used to assess the association between HHI and inpatient charges or costs separately, controlling for 17 patient, hospital, severity, and economic factors. The reported β-coefficients reflect percentage changes in charges or costs (e.g., β-coefficient = 1.06 denotes a +6% change). All results correspond to a standardized −0.1 change in HHI (increase in competition).RESULTSIn total, 472,938 nationwide admissions for cranial neurosurgery treated at 896 unique hospitals met inclusion criteria. Hospital HHIs ranged from 0.099 to 0.724 (mean 0.298 ± 0.105). Hospitals in more competitive markets had greater charge/cost markups (β-coefficient = 1.10, p < 0.001) and area wage indices (β-coefficient = 1.04, p < 0.001). Between 2006 and 2009, average neurosurgical charges and costs rose significantly ($62,098 to $77,812, p < 0.001; $21,385 to $22,389, p < 0.001, respectively). Increased interhospital competition was associated with greater charges for all admissions (β-coefficient = 1.07, p < 0.001) as well as cerebrovascular (β-coefficient = 1.08, p < 0.001), tumor (β-coefficient = 1.05, p = 0.039), CSF diversion (β-coefficient = 1.08, p < 0.001), neurotrauma (β-coefficient = 1.07, p < 0.001), and functional neurosurgery (β-coefficient = 1.11, p = 0.037) admissions. However, no significant associations were observed between HHI and costs, except for CSF diversion surgery (β-coefficient = 1.03, p = 0.021). Increased competition was not associated with important clinical outcomes, such as inpatient mortality, favorable discharge disposition, or complication rates, except for lower mortality for brain tumors (OR 0.78, p = 0.026), but was related to greater length of stay for all admissions (β-coefficient = 1.06, p < 0.001). For a sensitivity analysis adjusting for outcomes, all findings for charges and costs remained the same.CONCLUSIONSHospitals in more competitive markets exhibited higher charges for admissions of patients undergoing an in-hospital cranial procedure. Despite this, interhospital competition was not associated with increased inpatient costs except for CSF diversion surgery. There was no corresponding improvement in outcomes with increased competition, with the exception of a potential survival benefit for brain tumor surgery.

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“…We found that hospital closures were associated with an approximate 6-8 percent increase in market concentration throughout the post-closure period. A prior analysis of hospital closures between 1993 and 1998 found that closures led to a one-time, permanent 4 percent increase in prices (Wu 2008). This finding, along with the plethora of evidence in the market concentration literature, suggests that hospital closures increased remaining hospitals' pricing power and, subsequently, medical debt among consumers.…”

Section: Discussionmentioning

confidence: 94%

The Impact of Hospital Closures on Medical Debt in Collections: Analysis Using Consumer Credit Bureau Data

Andre,

Blavin,

Braga

et al. 2023

SSRN Journal

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The Price Effect of Hospital Closures

Cited by 7 publications

References 32 publications

Early Impact of the Affordable Care Act Coverage Expansion on Safety‐Net Hospital Inpatient Payer Mix and Market Shares

Early Impact of the Affordable Care Act Coverage Expansion on Safety‐Net Hospital Inpatient Payer Mix and Market Shares

Interhospital competition and hospital charges and costs for patients undergoing cranial neurosurgery

The Impact of Hospital Closures on Medical Debt in Collections: Analysis Using Consumer Credit Bureau Data

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