Choice of hospital: Which type of quality matters?

Gutacker, Nils; Siciliani, Luigi; Moscelli, Giuseppe; Gravelle, Hugh

doi:10.1016/j.jhealeco.2016.08.001

Cited by 126 publications

(147 citation statements)

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“…We argue that, although current outcomes are potentially influenced by rival's current outcomes (or possibly last-period outcomes), adjustment is sufficiently rapid that current outcomes are not affected by what rivals were doing 2 or 3 years previously. Some studies on the English NHS (Gaynor, Propper, & Seiler, 2012;Gutacker, Siciliani, Moscelli, & Gravelle, 2016;Sivey, 2012) show that patients choose hospitals with higher quality and lower waiting times. For example, Gutacker, Siciliani, Moscelli, and Gravelle (2016) find that the demand of a hospital decreases by 0.63% if a rival located within 10 km increases its PROMs quality by 1%.…”

Section: Methodsmentioning

confidence: 99%

“…Some studies on the English NHS (Gaynor, Propper, & Seiler, 2012;Gutacker, Siciliani, Moscelli, & Gravelle, 2016;Sivey, 2012) show that patients choose hospitals with higher quality and lower waiting times. For example, Gutacker, Siciliani, Moscelli, and Gravelle (2016) find that the demand of a hospital decreases by 0.63% if a rival located within 10 km increases its PROMs quality by 1%. Hospitals are therefore unlikely to delay their reaction to changes in rivals' performance by 2 or 3 years in order to avoid reductions in the volume of patients treated and, hence, revenue.…”

Section: Methodsmentioning

confidence: 99%

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Do hospitals respond to rivals' quality and efficiency? A spatial panel econometric analysis

et al. 2017

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We investigate whether hospitals in the English National Health Service change their quality or efficiency in response to changes in quality or efficiency of neighbouring hospitals. We first provide a theoretical model that predicts that a hospital will not respond to changes in the efficiency of its rivals but may change its quality or efficiency in response to changes in the quality of rivals, though the direction of the response is ambiguous. We use data on eight quality measures (including mortality, emergency readmissions, patient reported outcome, and patient satisfaction) and six efficiency measures (including bed occupancy, cancelled operations, and costs) for public hospitals between 2010/11 and 2013/14 to estimate both spatial cross-sectional and spatial fixed-and random-effects panel data models. We find that although quality and efficiency measures are unconditionally spatially correlated, the spatial regression models suggest that a hospital's quality or efficiency does not respond to its rivals' quality or efficiency, except for a hospital's overall mortality that is positively associated with that of its rivals. The results are robust to allowing for spatially correlated covariates and errors and to instrumenting rivals' quality and efficiency. KEYWORDS competition, efficiency, hospitals, quality, spatial econometrics | INTRODUCTIONQuality and efficiency are fundamental goals for policymakers in the hospital sector. In the presence of fixed prices, policymakers have argued that competition may induce hospitals to compete on quality to attract patients and to enhance their efficiency (Gaynor, 2007). Investigations of the effect of competition on quality and efficiency in the United States, the U.K., and other Organization for Economic Cooperation and Development countries have produced mixed results (Section 1.1).In this study, rather than examining the relationship between measures of competition and hospital quality and efficiency, we use an alternative approach by examining hospitals' strategic interactions. For example, in a competitive environment, we may expect a hospital to respond to an increase in quality by a rival hospital by also increasing quality: in industrial economics terms, qualities are strategic complements. We present a simple theory model (Section 2) that shows that this intuition can be correct if treatment costs are increasing in quality. The reduction in demand that follows from an increase in rival's quality reduces total treatment cost of providing quality and at the margin incentivises the Received: 17 November 2016 Revised: 3 July 2017 Accepted: 4 July 2017 hospital to increase quality. There is however an offsetting effect: the reduction in demand also reduces incentives to contain cost that reduces the profit margin on additional patients. We therefore investigate empirically whether quality and efficiency are strategic complements or strategic substitutes so that higher rivals' quality (efficiency) induces a hospital to increase or reduce its quality (effic...

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Section: Methodsmentioning

confidence: 99%

Section: Methodsmentioning

confidence: 99%

Do hospitals respond to rivals' quality and efficiency? A spatial panel econometric analysis

et al. 2017

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“…There is some literature to suggest that consumers (Phillips et al 2007) or payers (Robinson and MacPherson 2012) use published facility-level quality information when selecting facilities to use or include in preferred networks, if the information is easy to absorb and focused on identifying the "best and worst" quality providers. Though mixed, the literature suggests that competition among hospitals is associated with improvement in several observable indicators of hospital quality (Bloom et al 2015;FTC and DOJ 2014;Gaynor and Vogt 2000;Gutacker et al 2016). Similarly, greater competition among nursing home providers tends to be associated with higher quality (Grabowski and Hirth 2003;Grabowski and Town 2011;Huang and Hirth 2016).…”

Section: Competition and Qualitymentioning

confidence: 99%

State entry regulation and home health agency quality ratings

Ohsfeldt

2018

J Regul Econ

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There is a substantial literature assessing the impact of entry restrictions created by state certificate-of-need (CON) programs on hospital and nursing home markets, but comparatively little research has focused on CON for home health agencies (HHAs). We assessed the impact of state CON programs for HHAs, and for potential substitute service providers, on quality ratings for HHAs. HHA quality ratings were obtained from the Home Health Compare database developed by the Centers for Medicare and Medicaid Services (CMS) for the last quarter of 2010 through the last quarter of 2013. The HHA-level data were augmented with county-level area characteristics for each HHA in the CMS database. An ordered logit model was used to estimate the association between state CON restrictions and Low, Medium, and High quality categories, adjusted for HHA and area characteristics. The results indicated that HHAs in states with CON for HHAs were less likely to have High quality ratings, and more likely to have Medium quality ratings, compared to agencies in states without CON for home health. Additional research is needed to assess whether the apparent adverse impact of CON on HHA quality is related to diminished competition among HHAs in states with CON.

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“…Nevertheless, the emphasis of the most recent literature has been on measures of clinical quality. For instance, Gutacker et al (2016) find that hospital demand is responsive to observed quality for hip replacement surgery in the United Kingdom. Similarly, in their analysis of hip replacement surgeries in the United Kingdom, Beckert et al (2012) reveal that hospital demand increases with clinical quality.…”

Section: öZetmentioning

confidence: 99%

Hospital Quality and Demand: An Analysis of German Hospitals Using Distance-Metric Approach

Özbuğday¹

2017

eab

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In this paper, we estimate an aggregate demand model for German hospitals using various quality measures extracted from mandatory quality reports. In doing so, we adopt the Distance-Metric approach. The estimates suggest that demand in obstetrics field is responsive to some measures of clinical quality. Finally, the results indicate weak spillovers in hospital demand arising from the clinical quality of closer competitors.

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Choice of hospital: Which type of quality matters?

Cited by 126 publications

References 63 publications

Do hospitals respond to rivals' quality and efficiency? A spatial panel econometric analysis

Do hospitals respond to rivals' quality and efficiency? A spatial panel econometric analysis

State entry regulation and home health agency quality ratings

Hospital Quality and Demand: An Analysis of German Hospitals Using Distance-Metric Approach

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