Hospital Market Competition and Infant Mortality

Objective: For decades, organization of neonatal intensive care along regionalized care delivery systems has been a health policy priority, underpinned by research at the hospital level demonstrating significantly lower morbidity and mortality when high-risk deliveries occur in hospitals with a high-level, high-volume NICU. The clear association of higher volume and better outcomes has the policy implication that at least to some level, more concentrated NICU markets would be associated with better outcomes. However, the existing NICU volume investigations have failed to take into account market-level hospital competition. In other areas of health care, reduced competition has been associated with lower quality of care delivery. Our objective was to study the influence of these potentially opposing forces on neonatal and infant mortality.

Methods: County-level infant and neonatal (<28 day) mortality were extracted from CDC Wonder for 2000-2014. Data were restricted to the 550 largest counties for which CDC releases county-specific birth and death data (the excluded counties all have small populations). Counties were linked to Dartmouth Hospital Referral Regions (HRRs) and the mortality rates were calculated for each HRR/year. The competitiveness of each delivery market was defined as the Hirschman-Herfindahl Index (HHI) for the share of births in each HRR, using the reported number of births for each hospital within a given HRR from the AHA Annual Survey of Hospitals.

Results: Delivery markets are moderately concentrated. Average market concentration increased monotonically and significantly over the 15-year period from a mean of 0.201 in 2000 to a mean of 0.253 in 2014, with considerable variability across regions. The inter-quartile ranges were 0.095 to 0.273 and 0.122 to 0.311 in 2000 and 2014, respectively. Regression results showed that increased delivery market concentration was associated with reduced neonatal and infant mortality, but these results became non-significant when the time trend was controlled for.

Conclusions: For this initial examination, increased concentration of deliveries does not appear to be associated with worse neonatal or infant mortality. Further investigation is needed to better account for market and provider characteristics that are known to be associated with these outcomes. Given the significant effect of NICU volume, one needs to account for the fact that reaching minimum volume standards has different effects on the competitiveness of the market as market size varies. Thus, the optimal level of market concentration could well vary by market.