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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.
Medical Care
|December 4, 2018
Summary
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.
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.
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