Hospital Competition, Managed Care, and Mortality after Hospitalization for Medical Conditions in California

OBJECTIVE: To assess the effect of hospital competition and health maintenance organization (HMO) penetration on mortality after hospitalization for six medical conditions in California. DATA SOURCE: Linked hospital discharge and vital statistics data for short-term general hospitals in California in the period 1994-1999. The study sample included adult patients hospitalized for one of the following conditions: acute myocardial infarction (N=227,446), hip fracture (N=129,944), stroke (N=237,248), gastrointestinal hemorrhage (GIH, N=216,443), congestive heart failure (CHF, N=355,613), and diabetes (N=154,837). STUDY DESIGN: The outcome variable was 30-day mortality. We estimated multivariate logistic regression models for each study condition with hospital competition, HMO penetration, hospital characteristics, and patient severity measures as explanatory variables. PRINCIPAL FINDINGS: Higher hospital competition was associated with lower 30-day mortality for three to five of the six study conditions, depending on the choice of competition measure, and this finding was robust to a variety of sensitivity analyses. Higher HMO penetration was associated with lower mortality for GIH and CHF. CONCLUSIONS: Hospitals that faced more competition and hospitals in market areas with higher HMO penetration provided higher quality of care for adult patients with medical conditions in California. Studies using linked hospital discharge and vital statistics data from other states should be conducted to determine whether these findings are generalizable.