Back to Annual Meeting Page		American Public Health Association 133rd Annual Meeting & Exposition December 10-14, 2005 Philadelphia, PA

Abstract #110717

Ya-Ming Liu¹, Huang-Zi Ou², and Yea-Huei Kao Yang². (1) Department of Economics, National Cheng Kung University, No. 1 University Road, Tainan, 701, Taiwan, 886-6-2757575 ext. 50258, ymliu@mail.ncku.edu.tw, (2) Institute of Clinical Pharmacy, National Cheng Kung University, No. 1 University Road, Tainan, 701, Taiwan

The main purpose of this study is to examine the effect of competition on utilization of hypoglycemic agents of outpatient services for diabetes patients in a market setting where hospitals are classified into three levels according to Taiwanese accreditation system (i.e., medical centers, regional hospitals, and district hospitals). The principal research hypothesis is that under price regulation (FFS), competition increases utilization of new and expensive hypoglycemic agents, as well as decreases the frequency of poor drug quality indicators based on the frequency and severity of adverse effects, such as hypoglycemic and cardiovascular ischemic preconditioning effects. Furthermore, the competition from higher levels of hospitals is expected to bring positive spillover effects on drug utilization of hospitals with lower accreditation levels.

The limitations from previous empirical studies likely include the inconsistent result of the association between hospital competition and quality of medical care, the absence of drugs prescribing as quality indicators, and the interaction of competition from different hospital levels. In this study, competition was measured by Herfindahl-Hirschman index based on the market share of outpatient visits for each level of hospitals. Instrumental variable method was employed to identify the endogeneity and measurement error on competition index. The utilization of pharmaceutical products was measured by Defined Daily Dose (DDD), which was established by the WHO Collaborating Center for Drug Statistics Methodology and the assumed average maintenance dose, when a drug is used for its main indication by an adult.

We obtained the panel data from National Health Insurance Research Database from 1997 to 2001. Separate multiple regressions are estimated as a function of hospital and market structure characteristics: the distribution of patient age and gender in a hospital, number of beds and specialized doctors, caseload of diabetes patients, and average area served per hospital. Specifically, the burden of diabetes mellitus (case mix) was measured by complexity of pharmacology based on pancreas beta-cell secretory function: the mild severity as taking one oral hypoglycemic agent (OHA), the moderate as taking two, more than two OHAs, or OHAs combined with insulin, and the severe as alone controlled by insulin regimens.

The preliminary results show that competition from higher levels hospitals tends to increase utilization of new and expensive hypoglycemic agents, and reduce frequency of poor drug quality indicators. Overall, competition likely increases the drug expenditure, but might improve the quality of drug utilization for diabetes patients in Taiwan.

Learning Objectives:

• 1.Describe the hospital market structure characterized by Taiwanese accreditation system.
• 2.Develop drug utilization indicators by Defined Daily Dose (DDD).
• 3.Assess the effect of competition on the on utilization of hypoglycemic agents of outpatient services for diabetes patients.

Keywords: Drug Use, Competition

Presenting author's disclosure statement:

I wish to disclose that I have NO financial interests or other relationship with the manufactures of commercial products, suppliers of commercial services or commercial supporters.