Hospital competition and the expenses for treatments of acute and non-acute common diseases: evidence from China

BACKGROUND: Because there is heterogeneity in disease types, competition among hospitals could be influenced in various ways by service provision for diseases with different characteristics. Limited studies have focused on this matter. This study aims to evaluate and compare the relationships between hospital competition and the expenses of prostatectomies (elective surgery, representing treatments of non-acute common diseases) and appendectomies (emergency surgery, representing treatments of acute common diseases). METHODS: Multivariable log-linear models were constructed to determine the association between hospital competition and the expenses of prostatectomies and appendectomies. The fixed-radius Herfindahl-Hirschman Index was employed to measure hospital competition. RESULTS: We collected data on 13,958 inpatients from the hospital discharge data of Sichuan Province in China from September to December 2016. The data included 3578 prostatectomy patients and 10,380 appendectomy patients. The results showed that greater competition was associated with a lower total hospital charge for prostatectomy (p = 0.006) but a higher charge for appendectomy (p < 0.001). The subcategory analysis showed that greater competition was consistently associated with lower out-of-pocket (OOP) and higher reimbursement for both surgeries. CONCLUSIONS: Greater competition was significantly associated with lower total hospital charges for prostatectomies, while the opposite was true for appendectomies. Furthermore, greater competition was consistently associated with lower OOP but higher reimbursement for both surgeries. This study provides new evidence concerning the heterogeneous roles of competition in service provision for non-acute and acute common diseases. The findings of this study indicate that the pro-competition policy is a viable option for the Chinese government to relieve patients’ financial burden (OOP). Our findings also provide references and insights for other countries facing similar challenges.