Medicare and commercial inpatient resource use: impact of hospital competition

Abstract

Objectives: To examine the influence of hospital competition on small-area inpatient resource use by payer.

Methods: We measured hospital competition and inpatient resource use using data from the 2008 Healthcare Cost and Utilization Project State Inpatient Databases. Generalized linear models adjusted for patient, population, and market characteristics were used to assess the relationship between inpatient resource use and hospital competition.

Results: Hospital competition had a similar influence on inpatient resource intensity for Medicare and privately insured patients. Hospitals in more competitive markets had significantly lower costs per discharge for both Medicare and privately insured patients. Hospital competition was not significantly associated with length of stay per discharge for either payer.

Conclusion: Findings suggest that policies or incentives that promote or encourage competition in less competitive markets may reduce variation in resource use for both Medicare and private payers.