Is Hospital Market Power Associated With Longer E.R. Waiting Time? Evidence from Hospital Compare Data
Is Hospital Market Power Associated With Longer E.R. Waiting Time? Evidence from Hospital Compare Data
Tuesday, June 25, 2019
Exhibit Hall C (Marriott Wardman Park Hotel)
The paper aims at investigating the impact of hospital market structure on their quality choices. Particularly, I look at how hospital competition levels affect a set of the clinical conducts measurements that measures timely and effective care. My principal data come from Medicare Hospital Compare - Timely and Effective Care, which records information for hospitals reporting 21 quality measurements in E.R. setting during 2016 and 2017.
Using this national representative dataset, I found that hospitals with larger market share are able to significantly reduce the waiting time in Emergency Department (i.e.,exert higher quality). For instance: for an average hospital with average market share, an incremental change in it's market share is associated with a decrease of time spent at E.R. (from arrival to departure) by 11 minutes. This result is contrary to the prediction of traditional IO theory, where competition increases quality. Methodology wise, I used Poisson regressions with a population-based instrumental variable to eliminate endogeneity problem of market share.
My empirical results could help anti-trust authorities to promote policies using the rule of reason in which potential patients welfare improving and welfare decreasing effects of hospitals mergers must be assessed and weighed against each other.
Using this national representative dataset, I found that hospitals with larger market share are able to significantly reduce the waiting time in Emergency Department (i.e.,exert higher quality). For instance: for an average hospital with average market share, an incremental change in it's market share is associated with a decrease of time spent at E.R. (from arrival to departure) by 11 minutes. This result is contrary to the prediction of traditional IO theory, where competition increases quality. Methodology wise, I used Poisson regressions with a population-based instrumental variable to eliminate endogeneity problem of market share.
My empirical results could help anti-trust authorities to promote policies using the rule of reason in which potential patients welfare improving and welfare decreasing effects of hospitals mergers must be assessed and weighed against each other.
