Impact of Market Competition on Expenditure and Quality of Care, Evidence from Dialysis Treatment

One of research interests in recent health economics is whether the competition in health care industry decreases costs and improves qualities. On the one hand, the basic economic model shows that market competition increases the efficiency and therefore the social welfare. Hence, competition leads to a consequence of decreasing cost and improving quality. On the other hand, the health care industry is not a stylized economic market. Due to the intervention of insurance policies, the health care prices paid by consumers are not the same with its full price. Therefore, whether market competition increases quality of care and decreases health care expenditure is ambiguous result. This two-year project is trying to address this point, and analyze the impact of competition on health care expenditure first, and then the quality of care. We are trying to use four sub-dataset collected by NHRI, HV-CD, HOSB, DOC, and PER, and combine all these sub NHRI dataset into two data sets. The first one is a hospital level longitudinal data, which is used for the analysis of impact on expenditure of dialysis treatment in the first year. The second one is a patient-level longitudinal data, used for analysis the impact on quality of care for the second year project. Quality of care is defined as the one-year or three year mortality rate after doing its first dialysis treatment, and its survival rate. In our empirical framework, we are going to use a circular centering in a hospital within certain distance. Based on this definition, we can then calculate related variables for estimation, such as HHI. With these calculated variables, we can then estimate the impact of market competition on health care expenditure of dialysis treatment, mortality rate and survival rate.

Project ID:PF9706-0738
External Project ID:NSC96-2416-H182-007-MY2