Health Care Market Structure, Safety Net Hospitals, and the Quality of Hospital Care

1. Health Care Market Structure, Safety Net Hospitals, and the Quality of Hospital Care José J. Escarce, MD, PhD David Geffen School of Medicine at UCLA and RAND Health Jeannette Rogowski, PhD RAND Health Supported by Grant No. P01-HS10770 from AHRQ

2. Background • Structure of U.S. health care markets has changed over the past two decades • Large and growing number of Americans lack health insurance and rely on safety net providers for care • Policymakers and researchers believe changes in the structure of health care markets have stressed the safety net

3. Literature Review • Limited literature on the effects of health care market structure on the quality of hospital care • Primarily based on Medicare fee-for-service population • Primarily focused on myocardial infarction • Effects of hospital competition and managed care penetration inconsistent across studies • Literature does not address quality of care in safety net hospitals

4. Objectives • To assess whether hospital competition and HMO penetration affect the quality of hospital care • To assess whether quality of care differs between safety net and other hospitals • To assess whether hospital competition and HMO penetration have differential effects on the quality of care in safety net hospitals (compared with other hospitals)

5. Methods (#1) Data sources: • Linked hospital discharge and vital statistics data from California (1994-1999) • AHA Annual Survey of Hospitals • Medicare Cost Reports • InterStudy Regional Market Analysis Database • Census data

6. Methods (#2) Six study conditions: • Myocardial infarction (AMI) • Stroke (CVA) • Gastrointestinal bleeding (GIH) • Hip fracture (HIP) • Congestive heart failure (CHF) • Diabetes mellitus (DM)

7. Methods (#3) Logistic regression models: • Outcome: 30-day mortality • Explanatory variables: • Casemix variables • Hospital characteristics • Hospital safety net status • Health care market structure

8. Methods (#4) Measures of safety-net status • Public hospital • High DSH non-public hospital • Proportion of Medicaid admissions • Location in low SES neighborhood Measures of hospital competition (based on variable radii) • Hospital competition index (1-Herfindhal index) • Number of hospitals • Three-hospital concentration ratio HMO penetration in metropolitan area

9. Descriptive Data

10. Odds Ratios for 30-day Mortality

11. Sensitivity Analyses We conducted sensitivity analyses regarding the measures of safety net status and hospital competition. • Safety net status : Obtained same results when replaced the indicator for high DSH non-public hospital with the proportion of Medicaid admissions or the indicator for location in a low SES neighborhood. • Hospital competition: Obtained similar results when replaced the hospital competition index based on a 90% variable radius with the competition index based on a 75% variable radius, the number of hospitals based on either radius, or the three-hospital concentration ratio based on either radius. • In fact, with some of the alternative measures, greater competition significantly reduced mortality for 5 of 6 conditions.

12. Surprising Finding Measures of safety net status associated with lower 30-day mortality for CHF and DM. • Additional analyses found that patients with the study conditions admitted to public hospitals were younger and had fewer chronic comorbidities than patients admitted to non-public hospitals. • The differences were especially pronounced for patients with GIH, CHF, and DM. • Likely explanation for the surprising finding is unmeasured casemix favoring safety net hospitals.

13. Summary of Findings • Greater hospital competition associated with lower 30-day mortality (i.e., better quality) for 5 of 6 study conditions, depending on the competition measure. • Higher HMO penetration associated with lower 30-day mortality for 2 of 6 study conditions. • Safety net status associated with higher 30-day mortality for AMI but lower 30-day mortality for CHF and DM.

14. Summary of Findings (con’t) • Descriptive analyses suggest that findings of lower mortality for CHF and DM in safety net hospitals may be due to unmeasured case mix favoring safety net hospitals. • Little evidence that hospital competition and HMO penetration have differential effects on the quality of care provided by safety net hospitals.

15. Limitations • Limited information on casemix in administrative data. • HMO penetration measured at level of metropolitan areas • Could not elucidate mechanisms by which market structure affects quality