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Does Market Competition Reduce Hospital Charges & LOS for the Degenerative Lumbar Spinal Disease?: A Two-point Cross Sectional Study  

Lee, Joo Eun (Department of Public Health, Yonsei University College of Medicine)
Park, Eun-Cheol (Institute of Health Services Research, Yonsei University College of Medicine)
Lee, Sang Gyu (Institute of Health Services Research, Yonsei University College of Medicine)
Kim, Tae Hyun (Institute of Health Services Research, Yonsei University College of Medicine)
Publication Information
Korea Journal of Hospital Management / v.22, no.4, 2017 , pp. 33-49 More about this Journal
Abstract
Background: Health care utilizations and costs of the patients with degenerative lumbar spine disease in Korea increased dramatically. We analyzed whether hospital market competition is associated with charges and length of stay for patients with degenerative lumbar spine disease. Methods: We used Medical claims data of 2002 and 2010 from the nationwide representative sample of National Health Insurance Service of Korea. The study subjects were inpatients with degenerative lumbar spine disease (N=24,768) in 2002 and 2010. We employed a multilevel linear mixed model that included patient- and hospital-level variables in hierarchical data. Results: Higher hospital competition was associated with lower charges (${\beta}=57.5$, p<.0001 in 2002; ${\beta}=353.7$, p<.0001 in 2010) and shorter length of stay (${\beta}=0.3$, p<.0001 in 2002; ${\beta}=0.9$, p<.0001 in 2010) in both 2002 and 2010. Compared to 2002, the magnitude of such association became greater in 2010. However, subgroup analyses show that the influence of competition on charges and length of stay differed by hospital size. Conclusions: This study showed that hospital market structure (e.g., hospital competition) affects hospital efficiency (i.e., hospital charges and length of stay). It is necessary to continue to monitor how changing market structure influences hospital outcomes, including more detailed outcomes such as patient satisfaction.
Keywords
hospital competition; Hirschmann-Herfindahl Index; hospital charges; length of stay;
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