How the expansion of hospital systems has affected consumers

Health Affairs

Volumn 24, Issue 1, 2005, Pages 213-219

  Cuellar, Alison Evans ^a   Gertler, Paul J ^b  

^a Columbia University ^*  (United States)

^b UNIVERSITY OF CALIFORNIA   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ARTICLE; CONSUMER; FINANCIAL MANAGEMENT; HEALTH CARE QUALITY; HOSPITAL CARE; HOSPITAL PLANNING; HUMAN; PRODUCTIVITY; PROFIT; QUALITATIVE ANALYSIS; THEORETICAL STUDY; URBAN AREA;

CHARITIES; CONSUMER SATISFACTION; EFFICIENCY, ORGANIZATIONAL; HEALTH FACILITY MERGER; HOSPITAL COSTS; HUMANS; LONGITUDINAL STUDIES; QUALITY OF HEALTH CARE; UNCOMPENSATED CARE; UNITED STATES;

EID: 11344293242     PISSN: 02782715     EISSN: None     Source Type: Journal    
DOI: 10.1377/hlthaff.24.1.213     Document Type: Article

References (35)

1. Includes nonpublic, acute care, general hospitals only.
2. Irving Levin Associates, The Health Care Acquisition Report, 8th and 9th eds. (New Canaan, Conn.: Irving Levin Associates Inc., 2002 and 2003).
3. For instance, the AHA has published annual list ings of hospital mergers for many years. Not until 1995, however, did the AHA consistently provide data on hospital systems through its annual hos pital data set.
4. See F.T.C. v. Butterworth Health Corp., 946 F. Supp. 1245 (W.D. Michigan, 1996).
5. D. Dranove, C.J. Simpson, and W.D. White, "Is Managed Care Leading to Consolidation in Health-Care Markets?" Health Services Research 37, no. 3 (2002): 573-594.
6. C.S. Lesser and P.B. Ginsburg, "Update on the Nation's Health Care System: 1997-1999," Health Affairs 19, no. 6 (2000): 206-216.
7. C.S. Lesser and P.B. Ginsburg, "Back to the Future? New Cost and Access Challenges Emerge, Initial Findings from HSC'S Recent Site Visits," Issue Brief no. 35 (Washington: Center for Studying Health System Change, February 2001).
8. J. White, R.E. Hurley, and B.C. Strunk, "Getting Along or Going Along? Health Plan-Provider Contract Showdowns Subside," Issue Brief no. 74 (Washington: HSC, January 2004).
9. D. Dranove and R. Lindrooth, "Hospital Consolidation and Costs: Another Look at the Evidence," Journal of Health Economics 22, no. 6 (2003): 983-997; V. Ho and B.H. Hamilton, "Hospital Mergers and Acquisitions: Does Market Consolidation Harm Patients?" Journal of Health Economics 19, no. 5 (2000): 767-791; M. Vita and D. Sacher, "The Competitive Effects of Not-tor-Profit Hospital Mergers: A Case Study," Journal of Industrial Economics 49, no. 1 (2001): 63-84; R. Krishnan, "Market Restructuring and Pricing in the Hospital Industry," Journal of Health Economics 20, no. 2 (2001): 213-237; G.J. Young, K.R. Desai, and F.J. Hellinger, "Community Control and Pricing Patterns of Nonprofit Hospitals: An Antitrust Analysis," Journal of Health Politics, Policy and Law 25, no. 6 (2000): 1051-1081; and C. Capps and D. Dranove, "Hospital Consolidation and Negotiated PPO Prices," Health Affairs 23, no. 2 (2004): 175-181.
10. D. Dranove and R. Lindrooth, "Hospital Consolidation and Costs: Another Look at the Evidence," Journal of Health Economics 22, no. 6 (2003): 983-997; V. Ho and B.H. Hamilton, "Hospital Mergers and Acquisitions: Does Market Consolidation Harm Patients?" Journal of Health Economics 19, no. 5 (2000): 767-791; M. Vita and D. Sacher, "The Competitive Effects of Not-tor-Profit Hospital Mergers: A Case Study," Journal of Industrial Economics 49, no. 1 (2001): 63-84; R. Krishnan, "Market Restructuring and Pricing in the Hospital Industry," Journal of Health Economics 20, no. 2 (2001): 213-237; G.J. Young, K.R. Desai, and F.J. Hellinger, "Community Control and Pricing Patterns of Nonprofit Hospitals: An Antitrust Analysis," Journal of Health Politics, Policy and Law 25, no. 6 (2000): 1051-1081; and C. Capps and D. Dranove, "Hospital Consolidation and Negotiated PPO Prices," Health Affairs 23, no. 2 (2004): 175-181.
11. D. Dranove and R. Lindrooth, "Hospital Consolidation and Costs: Another Look at the Evidence," Journal of Health Economics 22, no. 6 (2003): 983-997; V. Ho and B.H. Hamilton, "Hospital Mergers and Acquisitions: Does Market Consolidation Harm Patients?" Journal of Health Economics 19, no. 5 (2000): 767-791; M. Vita and D. Sacher, "The Competitive Effects of Not-tor-Profit Hospital Mergers: A Case Study," Journal of Industrial Economics 49, no. 1 (2001): 63-84; R. Krishnan, "Market Restructuring and Pricing in the Hospital Industry," Journal of Health Economics 20, no. 2 (2001): 213-237; G.J. Young, K.R. Desai, and F.J. Hellinger, "Community Control and Pricing Patterns of Nonprofit Hospitals: An Antitrust Analysis," Journal of Health Politics, Policy and Law 25, no. 6 (2000): 1051-1081; and C. Capps and D. Dranove, "Hospital Consolidation and Negotiated PPO Prices," Health Affairs 23, no. 2 (2004): 175-181.
12. D. Dranove and R. Lindrooth, "Hospital Consolidation and Costs: Another Look at the Evidence," Journal of Health Economics 22, no. 6 (2003): 983-997; V. Ho and B.H. Hamilton, "Hospital Mergers and Acquisitions: Does Market Consolidation Harm Patients?" Journal of Health Economics 19, no. 5 (2000): 767-791; M. Vita and D. Sacher, "The Competitive Effects of Not-tor-Profit Hospital Mergers: A Case Study," Journal of Industrial Economics 49, no. 1 (2001): 63-84; R. Krishnan, "Market Restructuring and Pricing in the Hospital Industry," Journal of Health Economics 20, no. 2 (2001): 213-237; G.J. Young, K.R. Desai, and F.J. Hellinger, "Community Control and Pricing Patterns of Nonprofit Hospitals: An Antitrust Analysis," Journal of Health Politics, Policy and Law 25, no. 6 (2000): 1051-1081; and C. Capps and D. Dranove, "Hospital Consolidation and Negotiated PPO Prices," Health Affairs 23, no. 2 (2004): 175-181.
13. D. Dranove and R. Lindrooth, "Hospital Consolidation and Costs: Another Look at the Evidence," Journal of Health Economics 22, no. 6 (2003): 983-997; V. Ho and B.H. Hamilton, "Hospital Mergers and Acquisitions: Does Market Consolidation Harm Patients?" Journal of Health Economics 19, no. 5 (2000): 767-791; M. Vita and D. Sacher, "The Competitive Effects of Not-tor-Profit Hospital Mergers: A Case Study," Journal of Industrial Economics 49, no. 1 (2001): 63-84; R. Krishnan, "Market Restructuring and Pricing in the Hospital Industry," Journal of Health Economics 20, no. 2 (2001): 213-237; G.J. Young, K.R. Desai, and F.J. Hellinger, "Community Control and Pricing Patterns of Nonprofit Hospitals: An Antitrust Analysis," Journal of Health Politics, Policy and Law 25, no. 6 (2000): 1051-1081; and C. Capps and D. Dranove, "Hospital Consolidation and Negotiated PPO Prices," Health Affairs 23, no. 2 (2004): 175-181.
14. D. Dranove and R. Lindrooth, "Hospital Consolidation and Costs: Another Look at the Evidence," Journal of Health Economics 22, no. 6 (2003): 983-997; V. Ho and B.H. Hamilton, "Hospital Mergers and Acquisitions: Does Market Consolidation Harm Patients?" Journal of Health Economics 19, no. 5 (2000): 767-791; M. Vita and D. Sacher, "The Competitive Effects of Not-tor-Profit Hospital Mergers: A Case Study," Journal of Industrial Economics 49, no. 1 (2001): 63-84; R. Krishnan, "Market Restructuring and Pricing in the Hospital Industry," Journal of Health Economics 20, no. 2 (2001): 213-237; G.J. Young, K.R. Desai, and F.J. Hellinger, "Community Control and Pricing Patterns of Nonprofit Hospitals: An Antitrust Analysis," Journal of Health Politics, Policy and Law 25, no. 6 (2000): 1051-1081; and C. Capps and D. Dranove, "Hospital Consolidation and Negotiated PPO Prices," Health Affairs 23, no. 2 (2004): 175-181.
15. Public hospitals, specialty hospitals (for example, psychiatric hospitals), and those with fewer than 100 discharges are excluded.
16. Details on the regression methods are available from Alison Cuellar, ac2068@columbia.edu.
17. Hospital financial and discharge data were obtained from the Arizona Department of Health Services, Florida Agency for Health Care Administration, Massachusetts Division of Health Care Finance and Policy, and Wisconsin Bureau of Health Information.
18. We confirmed system participation of hospitals by referencing acquisition announcements in Modern Healthcare and other news sources as well as hospital Web sites. Examples include systems with a national presence, such as Tenet, as well as those that operate in local markets, such as New York Presbyterian Healthcare System.
19. We estimated fixed-effects models and include year indicators, state indicators, and state-year interactions. Other methodological details are available from the authors.
20. J.D. Kleinke, "Deconstructing the Columbia/HCA Investigation," Health Affairs 17, no. 2 (1998): 7-26.
21. The dependent variable in the cost models was logged because of the skewed nature of the data.
22. L.T. Kohn, J.M. Corrigan, and M.S. Donaldson, eds., To Err Is Human: Building a Safer Health System (Washington: National Academies Press, 1999); and IOM, Crossing the Quality Chasm: A New Health System for the Twenty-first Century (Washington: National Academies Press, 2001).
23. L.T. Kohn, J.M. Corrigan, and M.S. Donaldson, eds., To Err Is Human: Building a Safer Health System (Washington: National Academies Press, 1999); and IOM, Crossing the Quality Chasm: A New Health System for the Twenty-first Century (Washington: National Academies Press, 2001).
24. We used quality indicators developed by the Healthcare Cost and Utilization Project (HCUP). HCUP was intended to develop standardized, user-friendly quality indicators that could be calculated from patient-level discharge data such as the data used here. See Agency for Healthcare Research and Quality, Inpatient Quality Indicators, Version 2.1, Revision 2, September 2003, www.qualityindicators.ahrq.gov/iqi_archive.htm (16 November 2004); and Guide to Patient Safety Indicators, Version 2.1, Revision 1, May 2003, www.qualityindicators.ahrq.gov/psi_archive.htm (16 November 2004). Individual hospital rates of a particular type of event are adjusted using patient-level data and multivariate regression for age, sex, and diagnosis. Further details can be obtained from the authors.
25. We used quality indicators developed by the Healthcare Cost and Utilization Project (HCUP). HCUP was intended to develop standardized, user-friendly quality indicators that could be calculated from patient-level discharge data such as the data used here. See Agency for Healthcare Research and Quality, Inpatient Quality Indicators, Version 2.1, Revision 2, September 2003, www.qualityindicators.ahrq.gov/iqi_archive.htm (16 November 2004); and Guide to Patient Safety Indicators, Version 2.1, Revision 1, May 2003, www.qualityindicators.ahrq.gov/psi_archive.htm (16 November 2004). Individual hospital rates of a particular type of event are adjusted using patient-level data and multivariate regression for age, sex, and diagnosis. Further details can be obtained from the authors.
26. Mortality rates for conditions and procedures are combined and include acute myocardial infarction, congestive heart failure, gastrointestinal hemorrhage, hip fracture, pneumonia, stroke, abdominal aortic aneurysm repair, coronary artery bypass graft, craniotomy, esophageal resection, hip replacement, pancreatic resection, and pediatric heart surgery. The procedures utilization rates combine three procedures: cesarean section delivery; incidental appendectomy in the elderly; and bilateral cardiac catheterization. Patient safety indicators include accidental puncture and laceration; birth trauma - injury to neonate; complications of anesthesia; death in low-mortality diagnosis-related groups (DRGs); decubitus ulcer; failure to rescue; foreign body left in during procedure; iatrogenic pneumothorax; obstetric trauma - cesarean delivery; obstetric trauma - vaginal delivery with and without instrument; postoperative hemorrhage or hematoma, hip fracture, physiologic and metabolic derangements, pulmonary embolism or deep vein thrombosis, respiratory failure, sepsis, and wound dehiscence in abdominopelvic surgical patients; selected infections due to medical care; and transfusion reaction. Because in some cases many patients are at risk for these conditions, random samples were drawn for large hospitals, leading to a maximum sample of 10,000 discharges per hospital in the analysis.
27. AHRQ, Inpatient Quality Indicators, Version 2.1, Revision 2.
28. M. Gaynor and D. Haas-Wilson, "Change, Consolidation, and Competition in Health Care Markets," Journal of Economic Perspectives 13, no. 1 (1999): 141-164.
29. Additional details on how this measure was constructed are available from the authors.
30. J.A. Alexander and K.A. Schroer, "Governance in Multihospital Systems: An Assessment of Decision-Making Responsibility," Hospital and Health Services Administration 30, no. 2 (1985): 9-20.
31. White et al., "Getting Along or Going Along?"
32. See H.E. Frech, Competition and Monopoly in Medical Care (Washington: AEI Press, 1996); and M.A. Morrisey, "Competition in Hospital and Health Insurance Markets: A Review and Research Agenda," Health Services Research 36, no. 1, Part 2 (2001): 191-221.
33. See H.E. Frech, Competition and Monopoly in Medical Care (Washington: AEI Press, 1996); and M.A. Morrisey, "Competition in Hospital and Health Insurance Markets: A Review and Research Agenda," Health Services Research 36, no. 1, Part 2 (2001): 191-221.
34. P.J. Hammer and WM. Sage, "Antitrust, Health Care Quality, and the Courts," Columbia Law Review 102, no. 3 (2002): 545.
35. See, for example, California v. Sutter Health, 130 F. Supp. 2d 1109 (N.D. California, 2001); F.T.C. v. Tenet Health Care Corp., 186 F. 3d 1045 (8th Cir. 1999); and F.T.C. v. Freeman Hospital, 69 F. 3d 260 (8th Cir. 1995).