The changing effects of competition on non-profit and for-profit hospital pricing behavior

J Health Econ. 1999 Jan;18(1):69-86. doi: 10.1016/s0167-6296(98)00036-8.


Has the nature of hospital competition changed from a medical arms race in which hospitals compete for patients by offering their doctors high quality services to a price war for the patients of payors? This paper uses time-series cross-sectional methods on California hospital discharge data from 1986-1994 to show the association of hospital prices with measures of market concentration changed steadily over this period, with prices now higher in less competitive areas, even for non-profit hospitals. Regression results are used to simulate the price impact of hypothetical hospital mergers.

Publication types

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

MeSH terms

  • California
  • Catchment Area, Health / economics
  • Catchment Area, Health / statistics & numerical data
  • Diagnosis-Related Groups
  • Economic Competition / trends*
  • Health Care Sector / statistics & numerical data
  • Health Care Sector / trends*
  • Health Facility Merger / economics*
  • Health Services Research / methods
  • Hospital Charges / statistics & numerical data
  • Hospital Charges / trends*
  • Hospitalization / economics
  • Hospitals, Proprietary / economics*
  • Hospitals, Public / economics
  • Hospitals, Voluntary / economics*
  • Medicaid
  • Medicare
  • Ownership / economics
  • Regression Analysis
  • United States