Abstract 14264: National Comparison of Hospital Market Share for Out-of-Hospital Cardiac Arrest and Elective Cardiac Surgery

Introduction: Competition in the healthcare market is a theoretical driver of innovation, cost-savings, and improved quality. When patients are treated for certain emergent conditions, such as out-of-hospital cardiac arrest (OHCA), individuals have less choice in their treating hospital. For patients undergoing elective cardiac valve replacement surgery (EVRS), hospital choice may reflect distinct referral patterns and preferences. Our objective was to compare hospital market share for different cardiac services, thus allowing for better understanding of the care landscape and target interventions to improve outcomes. Methods: Using age-eligible Medicare fee-for-service institutional claims, an emergency department (ED) treated OHCA cohort was identified via ICD-9/10 diagnosis codes and ED charges. EVRS, an inpatient referral procedure, were identified from in-patient summary claims using procedure codes. Market shares were built for each hospital by sequential addition of ZIP-code areas and calculating the hospital’s cumulative market share. Geographic market share areas were defined for each hospital at 90%, 25% and 10% cut-offs if present. Correlation between corresponding market shares and patient counts were assessed using Pearson’s r. Results: Between 1/2013 and 12/2015, we identified 206,162 EVRS claims and 222,018 OHCA claims. Median age was similar (77 vs 78 yrs), as was percent of female patient (43% vs 44%). Very few beneficiaries (0.38%) appeared in both cohorts. Many more hospitals cared for OHCA than EVRS (4482 vs 1170). More OHCA treating hospitals achieved a 25% market share (68% vs 57%) however, EVRS hospital with a 25% market share covered more population (420,294 vs 66,394) and had a greater client radius (21 vs 15 miles). Among the hospitals providing care to both cohorts, the cumulative market share and patient counts were positively correlated (r = 0.49 and 0.46 respectively, p<0.001 for both). Conclusion: Despite many more hospitals providing care for OHCA, the market share for EVRS and OHCA trend together. This market trend, combined with the association of better outcomes with higher OHCA volume suggests that OHCA should be regionalized within markets to facilities that provide elective cardiac surgical procedures.

The Comparison Between Different Hospital Market Definition Approaches: An Empirical Analysis of 11 Representative Diseases in Sichuan Province, China

Objective: This study aims to provide empirical evidence for the controversy about whether the inference is consistent if alternative hospital market definition methods are employed, and for which definition method is the best alternative to the predicted patient flow approach.Data sources: Collecting data from the discharge data of inpatients and hospital administrative data of Sichuan province in China in the fourth quarter of 2018.Study Design: We employed Herfindahl–Hirschman Index (HHI) as the proxy of market competition used as an example to measure the hospital market structure. Correlation coefficients of HHIs based on different definition methods were assessed. The corresponding coefficient of each HHI estimated in identical regression models was then compared. In addition, since the predicted patient flow method has been argued by the literature of its advantages compared with the previous approaches, we took the predicted patient flow as a reference to compare with the other approaches.Data Extraction Methods: We selected the common diseases with a significant burden, and 11 diseases were included (902,767 hospitalizations).Principal Findings: The correlation coefficients of HHIs based on different market definition methods are all significantly greater than 0, and the coefficients of HHIs are different in identical regression models. Taking the predicted patient flow approach as a reference, we found that the correlation coefficients between HHIs based on fixed radius and predicted patient flow approach is larger than others, and their parameter estimates are all consistent.Conclusion: Although the HHIs based on different definition methods are significantly and positively correlated, the inferences about the effectiveness of market structure would be inconsistent when alternative market definition methods are employed. The fixed radius would be the best alternative when researchers want to use the predicted patient flow method to define the hospital market but are hindered by the data limitations and computational complexity.

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.

Investigating the link between medical urgency and hospital efficiency – Insights from the German hospital market

With hospital budgets remaining tight and healthcare expenditure rising due to demographic change and advances in technology, hospitals continue to face calls to contain costs and allocate their resources more efficiently. In this context, efficiency has emerged as an increasingly important way for hospitals to withstand competitive pressures in the hospital market. Doing so, however, can be challenging given unpredictable fluctuations in demand, a prime example of which are emergencies, i.e. urgent medical cases. The link between medical urgency and hospitals’ efficiency, however, has been neglected in the literature to date. This study therefore aims to investigate the relationship between hospitals’ urgency characteristics and their efficiency. Our analyses are based on 4094 observations from 1428 hospitals throughout Germany for the years 2015, 2016, and 2017. We calculate an average urgency score for each hospital based on all cases treated in that hospital per year and also investigate the within-hospital dispersion of medical urgency. To analyze the association of these urgency measures with hospitals’ efficiency we use a two-stage double bootstrap data envelopment analysis approach with truncated regression. We find a negative relationship between the urgency score and hospital efficiency. When testing for non-linear effects, the results reveal a u-shaped association, indicating that having either a high or low overall urgency score is beneficial in terms of efficiency. Finally, our results reveal that higher within-hospital urgency dispersion is negatively related to efficiency.