Study Can’t Link Hospital Competition to Quality Improvements

A study out of the University of Michigan cannot identify a clear relationship between surgical outcomes and the level of competition a hospital faces.

The study recently published in JAMA Surgery analyzed Medicare Provider Analysis and Review files (MEDPAR) between 2015 and 2018, which included data on beneficiary index admission for a procedure as well as any subsequent hospitalization, and linked them to hospital characteristics from the Annual Survey of the American Hospital Association.

Researchers found no consistent association between hospital competition and quality of surgical care across ten high-risk procedures. In fact, there was no difference in 30-day mortality between hospitals in low-competition and high-competition areas for half of the procedures (open aortic aneurysm repair, bariatric surgery, esophagectomy, knee replacement, and hip replacement).

And compared to hospitals in low-competition markets, hospitals in the highest-competition markets had lower risk-adjusted 30-day mortality rates for pancreatectomy (OR 0.93, 95 percent CI 0.91-0.95), rectal resection (OR 0.92, 95 percent CI 0.86-0.98), and lung resection (OR 0.88, 95 percent CI 0.86-0.90). The rates were higher for mitral valve repair (OR 1.11, 95 percent CI 1.07-1.14) and carotid endarterectomy (OR 1.06, 95 percent CI 1.03-1.09).

Trends in 30-day readmissions were also mixed. Hospitals facing greater competition having higher rates for half of the procedures (open aortic aneurysm repair, knee replacement, mitral valve repair, rectal resection, and carotid endarterectomy procedure; ranging from OR, 1.01; 95 percent CI, 1.00-1.02, for knee replacement to OR, 1.05; 95 percent CI, 1.02-1.08, for rectal resection).

Additionally, there was no difference for three procedures (bariatric surgery: OR, 1.03; 95 percent CI, 0.99-1.07; esophagectomy: OR, 1.02; 95 percent CI, 0.99-1.06; and pancreatectomy: OR, 1.00; 95 percent CI, 0.99-1.01).

However, researchers were able to link the type of patients treated by hospitals according to market competition. High-competition hospitals cared for older patients, more racial and ethnic minority patients, and those who had more comorbid conditions.

“Taken together, our findings challenge the common assumption that hospital competition may be good for care as it relates to complex surgical procedures,” researchers wrote in the study.

Industry leaders have raised concerns about rapid hospital consolidation in light of increasing merger and acquisition activity in healthcare. A growing body of literature has tied hospital mergers and acquisitions to higher prices for payers and patients and no or little improvement in care quality. Although, studies have shown better outcomes from some deals and greater access to care.

The research is still a mixed bag, but the general idea is that greater competition—from less consolidation—will spur innovation and improve care quality as hospitals compete for patients.

The JAMA Surgery study, however, suggested that other factors may be at play when it comes to surgical outcomes and quality of care.

“These findings suggest that competition may not be the end-all that [policymakers] hope for when it comes to improving quality,” doctors from the University of Texas MD Anderson Cancer Center and Harbor-UCLA Medical Center, said in an accompanying editorial.

University of Texas’ Christopher P. Childers, MD, PhD and Harbor-UCLA Medical Center’s Beverley A. Petrie, MD, and Christian de Virgilio, MD, said the study adds important literature on hospital competition and consolidation. They pointed out that the study uses a measure of competition that exceeds the ones used by the Department of Justice (DoJ) to evaluate monopolies and consolidation in a market.

“When it comes to the value equation, keeping the quality numerator steady while increasing the cost denominator is still a net negative for the health care system,” Childers et al. wrote. “Unfortunately, we may also be too late. Using the aforementioned DOJ cutoff (HHI >2500) for low-competition markets, a recent analysis showed that 90 [percent] of US hospitals are now in low-competition markets. In this new normal, efforts moving forward should focus on the steps available to increase quality and reduce cost in the absence of hospital competition.”