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Competition in Outpatient Procedure Markets.

Laurence C Baker1, M K Bundorf, Daniel P Kessler

  • 1Stanford University and the National Bureau of Economic Research, Stanford, CA.

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Summary
This summary is machine-generated.

Increased competition from ambulatory surgery centers (ASCs) and hospitals lowers outpatient procedure prices for consumers. More competition among hospitals significantly reduces prices, benefiting patients seeking care.

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Area of Science:

  • Health Economics
  • Healthcare Market Analysis
  • Health Services Research

Background:

  • Over 50% of US medical procedures occur in outpatient settings.
  • Limited research exists on how competition impacts outpatient procedure prices.

Purpose of the Study:

  • To examine the relationship between healthcare provider competition and outpatient procedure prices.
  • To assess the impact of ambulatory surgery centers (ASCs) and hospital competition on prices.

Main Methods:

  • Utilized Health Care Cost Institute claims data (2008-2012).
  • Constructed county-level price indices for hospital outpatient departments and ASCs.
  • Employed regression analysis to estimate price associations with competition and market characteristics.

Main Results:

  • Ambulatory surgery center (ASC) availability correlated with decreased outpatient procedure prices.
  • Hospital competition showed a greater price reduction effect than ASC availability.
  • Competition among ASCs also led to lower prices paid to ASCs.

Conclusions:

  • Competition, particularly from ASCs, leads to lower outpatient procedure prices for consumers.
  • The overall welfare impact requires balancing price reductions with potential volume increases.