Hospital competition, resource allocation and quality of careReport as inadecuate

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BMC Health Services Research

, 2:10

First Online: 27 May 2002Received: 21 December 2001Accepted: 27 May 2002DOI: 10.1186-1472-6963-2-10

Cite this article as: Mukamel, D.B., Zwanziger, J. & Bamezai, A. BMC Health Serv Res 2002 2: 10. doi:10.1186-1472-6963-2-10


BackgroundA variety of approaches have been used to contain escalating hospital costs. One approach is intensifying price competition. The increase in price based competition, which changes the incentives hospitals face, coupled with the fact that consumers can more easily evaluate the quality of hotel services compared with the quality of clinical care, may lead hospitals to allocate more resources into hotel rather than clinical services.

MethodsTo test this hypothesis we studied hospitals in California in 1982 and 1989, comparing resource allocations prior to and following selective contracting, a period during which the focus of competition changed from quality to price. We estimated the relationship between clinical outcomes, measured as risk-adjusted-mortality rates, and resources.

ResultsIn 1989, higher competition was associated with lower clinical expenditures levels compared with 1982. The trend was stronger for non-profit hospitals. Lower clinical resource use was associated with worse risk adjusted mortality outcomes.

ConclusionsThis study raises concerns that cost reductions may be associated with increased mortality.

Electronic supplementary materialThe online version of this article doi:10.1186-1472-6963-2-10 contains supplementary material, which is available to authorized users.

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Author: Dana B Mukamel - Jack Zwanziger - Anil Bamezai


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