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Biomedical subjects

D Dranove

Publications and source records attributed to D Dranove.

11 recordsLinked to original sources
PubMed1998

Emerging issues in the antitrust definition of healthcare markets.

Managed care has shifted purchasing decisions from patients towards payers. While this shift has been associated with increased price competition in provider markets, we believe that it may enhance the potential for consumer injury from mergers in geographic markets previously considered immune to antitrust concerns (e.g. suburban components of large metropolitan areas). In addition, recent changes also increase concerns about mergers in product submarkets such as tertiary care.

Antitrust Laws↗
PubMed1998

Medicaid-dependent hospitals and their patients: how have they fared?

OBJECTIVE: To examine how private hospitals dependent on Medicaid for a large proportion of their revenues have fared in the face of substantial Medicaid (and more modest Medicare) reimbursement cutbacks and growing managed care. We specifically test three hypotheses regarding Medicaid-dependent hospitals: (1) that they are more likely to "cost-shift" cutbacks to private patients; (2) that they are more likely to cut services for Medicaid (and other) patients; and (3) that they are more likely to close. DATA/STUDY SETTING: Private short-term hospitals in California a state that has experienced a rapid growth in managed care since the early 1980s. Data are drawn from the California Office of Statewide Health Planning and Development (OSHPD) Hospital Disclosure Files for fiscal years 1983 and 1992. STUDY DESIGN: We compare changes in net prices and the provision of services, proxied by list price-adjusted charges, at hospitals for Medicaid, Medicare, and privately insured patients between fiscal years 1983 and 1992 controlling for hospital and market characteristics, case mix, and the proportion of revenues from Medicaid patients. We also examine the probability that a hospital closed during the study period as a function of hospital and market characteristics and payer mix. Although the growth of managed care is hypothesized to reduce opportunities for "cost shifting," it may also confound our analysis of price changes if Medicaid-dependent hospitals are unattractive to managed care patients and respond by offering lower prices to plans. PRINCIPAL FINDINGS: We find no evidence that Medicaid-dependent hospitals raised prices to private patients in response to Medicaid (or Medicare) cutbacks; if anything, they lowered them. However, we find that service levels fell for Medicaid (and Medicare) patients relative to those for privately insured patients and that reductions were greater at Medicaid-dependent hospitals. In addition, our findings suggest that service levels also fell for private patients at Medicaid-dependent hospitals, although reductions were smaller for these patients, suggesting that quality, may be a public good at hospitals. Finally, Medicaid-dependent hospitals were more likely to close. CONCLUSIONS: It been suggested that private hospitals may respond to public reimbursement cutbacks by simply "shifting" costs to privately insured patients, limiting overall cost savings but insulating public patients and hospitals from the effects of cutbacks. We find no evidence of cost shifting. Rather, our results suggest that patients and hospitals bore the brunt of cutbacks; service levels fell at Medicaid-dependent hospitals and such hospitals were more likely to go out of business. This suggests that the consequences of proposed Medicare and Medicaid cutbacks could be severe for public patients and the hospitals that care for them.

California↗
PubMed1998

The effect of managed care on the incomes of primary care and specialty physicians.

OBJECTIVE: To determine the effects of managed care growth on the incomes of primary care and specialist physicians. DATA SOURCES: Data on physician income and managed care penetration from the American Medical Association, Socioeconomic Monitoring System (SMS) Surveys for 1985 and 1993. We use secondary data from the Area Resource File and U.S. Census publications to construct geographical socioeconomic control variables, and we examine data from the National Residency Matching Program. STUDY DESIGN: Two-stage least squares regressions are estimated to determine the effect of local managed care penetration on specialty-specific physician incomes, while controlling for factors associated with local variation in supply and demand and accounting for the potential endogeneity of managed care penetration. DATA COLLECTION: The SMS survey is an annual telephone survey conducted by the American Medical Association of approximately one percent of nonfederal, post-residency U.S. physicians. Response rates average 60-70 percent, and analysis is weighted to account for nonresponse bias. PRINCIPAL FINDINGS: The incomes of primary care physicians rose most rapidly in states with higher managed care growth, while the income growth of hospital-based specialists was negatively associated with managed care growth. Incomes of medical subspecialists were not significantly affected by managed care growth over this period. These findings are consistent with trends in postgraduate training choices of new physicians. CONCLUSIONS: Evidence is consistent with a relative increase in the demand for primary care physicians and a decline in the demand for some specialists under managed care. Market adjustments have important implications for health policy and physician workforce planning.

Age Distribution↗
PubMed1993

Segmentation in local hospital markets.

This study examines evidence of market segmentation on the basis of patients' insurance status, demographic characteristics, and medical condition in selected local markets in California in the years 1983 and 1989. Substantial differences exist in the probability patients may be admitted to particular hospitals based on insurance coverage, particularly Medicaid, and race. Segmentation based on insurance and race is related to hospital characteristics, but not the characteristics of the hospital's community. Medicaid patients are more likely to go to hospitals with lower costs and fewer service offerings. Privately insured patients go to hospitals offering more services, although cost concerns are increasing. Hispanic patients also go to low-cost hospitals, ceteris paribus. Results indicate little evidence of segmentation based on medical condition in either 1983 or 1989, suggesting that "centers of excellence" have yet to play an important role in patient choice of hospital. The authors found that distance matters, and that patients prefer nearby hospitals, moreso for some medical conditions than others, in ways consistent with economic theories of consumer choice.

California↗
PubMed1991

How fast are hospital prices really rising?

The hospital services component of the Consumer Price Index (CPI) measures the cost of hospital services to private patients paying list prices. It is, however, widely used as an estimate of the overall rate of inflation in hospital prices in spite of the fact that there are strong reasons to believe that it is inappropriate to use the CPI for this purpose. This is because: 1) A growing number of patients are enrolled in health maintenance organizations (HMOs) and preferred provider organizations (PPOs), which negotiate discounts from list prices; and 2) the size of the discounts may have been increasing. The potential result is a gap between the rate of inflation of list prices and the rate of inflation of actual prices paid in transactions. This study explores whether such a gap exists and determines its possible magnitude. In addition, parallel indices for list and actual prices are computed on the basis of data from California hospitals for fiscal years 1983-1988. The analysis suggests that list price inflation has greatly exceeded actual inflation--by a factor of two for recent years. These findings have broad implications for evaluating not only inflation but also the impact of cost containment strategies.

Abstracting and Indexing↗
PubMed1987

Agency and the organization of health care delivery.

Recent developments in the theory of agency--the relationship that arises e when a principal delegates authority to an agent--offer powerful insights into the organization of health care delivery systems. In this paper we first provide an overview of the agency literature and then illustrate how relationships between doctors, patients, and hospitals can be explored within an agency framework. We find that not only the evolution of standard fee-for-service relationships but also the emergence of HMOs can be analyzed as responses to uncertainty and to difficulties in writing complete, enforceable contracts. These findings have broad implications for health policy and suggest a variety of strategies for addressing agency issues.

Contract Services↗
PubMed1986

The effect of injecting price competition into the hospital market: the case of preferred provider organizations.

Preferred provider organizations (PPOs) and other discount health care purchasers are injecting price competition into the hospital market, which has hitherto been insulated from price competition by comprehensive and generous insurance coverage. Providing the discounts demanded by PPOs thus poses unaccustomed and difficult problems for hospitals. We constructed a model to study the choices forced by PPOs on the hospital market. We predict that prices will fall, excess capacity will be reduced, and some hospitals may develop financial problems. In the extreme case, prices will fall substantially, some hospitals will go bankrupt, excess capacity will be eliminated, and an unprecedented price volatility will be introduced into the market.

Costs and Cost Analysis↗
PubMed1985

An empirical study of a hospital-based home care program.

Although it is widely perceived that home nursing care reduces the utilization of hospital services, and thus the cost of care, the magnitude of the savings is not clear. In this study of a hospital-based home nursing care program, we compared the medical process at two hospitals, one with and one without a home nursing department. Regression analysis showed that home nursing care significantly reduced both the length of hospital stays and the number of follow-up visits to outpatient clinics. After accounting for the cost of the home nursing program, however, we found that the program did not significantly reduce overall hospital expenditures.

Aftercare↗
PubMedDate not supplied

The impact of managed care on the physician marketplace.

OBJECTIVE: To examine the impact of managed care on the employment and compensation of primary care and specialty physicians, as measured by changes in income, physician-to-population ratios, and specialty choices. METHODS: The authors used data from the American Medical Association's Socioeconomic Monitoring System survey, a nationally representative 1% random survey of post-residency patient-care physicians, and location data from the AMA Masterfile to evaluate the relationship between the growth in managed care from 1985 to 1993 and (a) inflation-adjusted physician incomes and (b) physician-to-population ratios for primary care physicians and specialists. They also used data from the National Residency Matching Program for 1989 through 1995 to look at trends in available positions and specialty choices. RESULTS: Primary care incomes grew 4.78% annually ($33,526 cumulatively) in states with the highest managed care growth, compared to 1.20% ($7448 cumulatively) in the lowest quartile of managed care growth. The difference in income growth for medical and surgical subspecialists between the highest and lowest quartiles was not statistically significant. The incomes of radiologists, anesthesiologists, and pathologists (RAPs) rose 0.14%, or $1700, in the highest quartile versus 4.14% ($58,558) in the lowest. Subspecialists per capita did not differ by quartile of managed care growth; but RAPs per capita increased fastest in states in the lowest quartile. Between 1989 and 1995, the number of family practice and pediatric residency positions that were filled rose 32%, while the number filled remained stable for medical and surgical subspecialists and the number of RAP positions filled fell 14%. CONCLUSIONS: The growth in managed care has been associated with significant changes in physician incomes and practice locations. Between 1985 and 1993, states with the fastest growth in managed care penetration saw the highest rate of growth in primary care physicians' income and the slowest rate of growth in RAP physicians' income. At the same time, the number of RAP physicians grew most rapidly in those states with the lowest rate of managed care growth. Finally, between 1989 and 1995, there was a dramatic increase in the number of primary care residency positions filled and a marked decrease in the number of RAP residency positions filled across the country.

Economics, Medical↗