Updated Variable-Radius Measures of Hospital Competition

Published in: Health Services Research, v. 39, no. 2, Apr. 2004, p. 417-430

Posted on RAND.org on December 31, 2003

by Carole Roan Gresenz, Jeannette Rogowski, Jose J. Escarce

Read More

Access further information on this document at www.blackwell-synergy.com

This article was published outside of RAND. The full text of the article can be found at the link above.

OBJECTIVE: To calculate variable-radius measures of hospital market size and create measures of competition for hospitals' markets. DATA SOURCES: Discharge abstracts from the 1997 State Inpatient Databases of the Healthcare Cost and Utilization Project (HCUP) linked with the American Hospital Association (AHA) Annual Survey, Area Resource File (ARF), InterStudy Regional Market Analysis database, and Medicare's Prospective Payment System Impact Files. STUDY DESIGN: Hospital radii capturing 75 and 90 percent of hospital admissions regressed against hospital and health care market characteristics and other local area characteristics, where the specification was designed to maximize predictive ability. The number of competing hospitals and the Herfindahl-Hirschman index (HHI) of competition were calculated for each hospital's market. DATA COLLECTION METHODS: Discharge abstracts were used to create actual radii for hospitals in nine states. These data were linked with other data describing hospital, health care market, and other characteristics. PRINCIPAL FINDINGS: The authors explained 44.7 and 9.6 percent of the variation among urban and rural hospitals, respectively, in radii that capture 90 percent of patients, and slightly less of the variation in radii that capture 75 percent of patients. Population density; number of other hospitals in the local area; and hospital characteristics such as medical school affiliation, percentage of admissions that are Medicaid, case mix, and service offerings are important correlates of a hospital's market size. CONCLUSIONS: Predicted radii and associated competition measures were created (matched to AHA hospital identifiers) for all nonfederal, short-term, general medical/surgical hospitals in the continental United States for which complete data were available in 1997 (N=4,806) and are available from the authors.

This report is part of the RAND Corporation external publication series. Many RAND studies are published in peer-reviewed scholarly journals, as chapters in commercial books, or as documents published by other organizations.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.