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Updated variable-radius measures of hospital competition
Carole Roan Gresenz1, Jeannette Rogowski, José J Escarce
1RAND, 1200 South Hayes Street, Arlington, VA 22202-5050, USA.
Health Services Research
|March 23, 2004
Summary
Researchers calculated hospital market sizes and competition using 1997 data. Key factors influencing hospital market size include population density and local hospital characteristics, aiding in understanding healthcare competition.
Area of Science:
- Health Services Research
- Health Economics
- Healthcare Market Analysis
Background:
- Understanding hospital market size and competition is crucial for healthcare policy and planning.
- Previous methods for defining hospital service areas and competition lacked precision.
Purpose of the Study:
- To develop variable-radius measures of hospital market size.
- To create accurate measures of hospital market competition.
Main Methods:
- Utilized 1997 State Inpatient Databases, American Hospital Association data, Area Resource File, and Medicare data.
- Calculated hospital radii capturing 75% and 90% of admissions.
- Determined the number of competing hospitals and the Herfindahl-Hirschman index (HHI) for each market.
Main Results:
- Explained 44.7% of variation in radii for urban hospitals and 9.6% for rural hospitals capturing 90% of patients.
- Identified population density, number of local hospitals, and hospital characteristics as key correlates of market size.
Conclusions:
- Created predicted radii and competition measures for 4,806 U.S. hospitals.
- These measures provide a valuable tool for analyzing healthcare markets and competition.