The effects of hospital competition and the Medicare PPS program on hospital cost behavior in California

J Health Econ. 1988 Dec;7(4):301-20. doi: 10.1016/0167-6296(88)90018-5.


Previous studies of hospital competition have found that greater competition leads to higher hospital costs. In this paper we report how the behavior of California's hospitals has changed since the introduction of programs intended to contain the rate of increase of hospital costs. Using data that cover the period preceding and following the introduction of these programs, we found that hospitals in more competitive markets have lowered their costs significantly.

Publication types

  • Research Support, Non-U.S. Gov't
  • Research Support, U.S. Gov't, Non-P.H.S.

MeSH terms

  • California
  • Catchment Area, Health
  • Costs and Cost Analysis / statistics & numerical data*
  • Data Collection
  • Economic Competition / legislation & jurisprudence*
  • Economics / legislation & jurisprudence*
  • Economics, Hospital / statistics & numerical data*
  • Medicare
  • Models, Statistical
  • Prospective Payment System*