An ecological investigation of causes for variation in price-adjusted ‘overall per capita Medicare expenditures’ within regional market systems was completed using multivariate regression techniques and the ‘Structure, Conduct, Performance (SCP)’ industrial organization market economic analysis paradigm. The regression model predicted overall per capita expenditures in regional and local market systems, using consistently calculated age, sex and price-adjusted Medicare market data for 306 Hospital Referral Region (HRR) and 3422 associated local Hospital Service Area (HSA) markets available through the Dartmouth Atlas of Health Care. Adjusting for differences in market system demand, the investigator evaluated effects of differences in market structure on overall per capita expenditures in regional and local market systems. The analysis also controlled for differences in state-level policy environments. Measures of market structure included percent primary care providers within the market, local hospital market concentration [i.e., HSA-level Herfindahl-Hirschmann Index (HHI)] or regional (HRR) referral program market concentration, and presence of either a single medical school or of two or more medical schools within a market’s associated referral region (HRR). Significant expenditure depressing effects were observed from increased percent primary care providers, increased levels of local HHI or regional referral program market concentration, and presence of a single Medical School within an associated referral market. The use of systemic and ecological investigative methods appears to provide structural explanations for observed variation in overall per capita Medicare cost levels. The methods and model described appear to provide a strong analytical foundation to support future policy analyses, effectiveness evaluations, and policy initiatives.
Learning Objectives: 1) To define the relationship of key market structue elements to observed levels of overall per capita health care costs. 2) To provide structural explanations for observed variation in overall per capita health care costs in 3,422 local and 306 regional markets. 3) To suggest key policy strategies to control long term growth in overall per capita health care costs
Keywords: Economic Analysis, Healthcare Costs
Presenting author's disclosure statement:
Organization/institution whose products or services will be discussed: None
I do not have any significant financial interest/arrangement or affiliation with any organization/institution whose products or services are being discussed in this session.