Do Different Measures of Hospital Competition Matter in Empirical Investigations of Hospital Behavior

Do Different Measures of Hospital Competition Matter in Empirical Investigations of Hospital... Considerable controversy exists about the appropriate way hospital competition should be measured and whether findings are accurate if certain methods are employed. Data from the Healthcare Cost and Utilization Project (HCUP), the American Hospital Association (AHA), and other supplemental data sources are used to create and evaluate hospital competition measures. Correlation coefficients of these measures are assessed. Moreover, each measure is independently included as an explanatory variable in otherwise identical hospital cost function regressions. Their corresponding parameter estimates are then compared. Most measures are highly correlated. Inferences about the effect of competition on hospital cost remain the same when alternative hospital competition measures are employed. We caution researchers against using this finding to arbitrarily select a competition measure when the magnitude of the estimates is important. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

Do Different Measures of Hospital Competition Matter in Empirical Investigations of Hospital Behavior

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Publisher
Kluwer Academic Publishers
Copyright
Copyright © 2005 by Springer
Subject
Economics; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1007/s11151-004-6067-7
Publisher site
See Article on Publisher Site

Abstract

Considerable controversy exists about the appropriate way hospital competition should be measured and whether findings are accurate if certain methods are employed. Data from the Healthcare Cost and Utilization Project (HCUP), the American Hospital Association (AHA), and other supplemental data sources are used to create and evaluate hospital competition measures. Correlation coefficients of these measures are assessed. Moreover, each measure is independently included as an explanatory variable in otherwise identical hospital cost function regressions. Their corresponding parameter estimates are then compared. Most measures are highly correlated. Inferences about the effect of competition on hospital cost remain the same when alternative hospital competition measures are employed. We caution researchers against using this finding to arbitrarily select a competition measure when the magnitude of the estimates is important.

Journal

Review of Industrial OrganizationSpringer Journals

Published: Nov 10, 2004

References

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