- Split View
-
Views
-
Cite
Cite
Seung Ju Kim, Eun-Cheol Park, Sun Jung Kim, Kyu-Tae Han, Sung-In Jang, How did market competition affect outpatient utilization under the diagnosis-related group-based payment system?, International Journal for Quality in Health Care, Volume 29, Issue 3, June 2017, Pages 399–405, https://doi.org/10.1093/intqhc/mzx042
- Share Icon Share
Abstract
Although competition is known to affect quality of care, less is known about the effects of competition on outpatient health service utilization under the diagnosis-related group payment system. This study aimed to evaluate these effects and assess differences before and after hospitalization in South Korea.
Population-based retrospective observational study.
We used two data set including outpatient data and hospitalization data from National Health Claim data from 2011 to 2014.
Participants who were admitted to the hospital for hemorrhoidectomy were included. A total of 804 884 hospitalizations were included in our analysis.
The outcome variables included the costs associated with outpatient examinations and the number of outpatient visits within 30 days before and after hospitalization.
High-competition areas were associated with lower pre-surgery examination costs (rate ratio [RR]: 0.88, 95% confidence interval [CI]: 0.88–0.89) and fewer outpatient visits before hospitalization (RR: 0.98, 95% CI: 0.98–0.99) as well as after hospitalization compared with moderate-competition areas.
Our study reveals that outpatient health service utilization is affected by the degree of market competition. Future evaluations of hospital performance should consider external factors such as market structure and hospital location.
Introduction
It is well-known that competition affect quality of healthcare and cost. A higher volume of patients within a hospital leads to better quality of care outcomes [1, 2]. To improve health efficiency, healthcare providers have changed healthcare services for patients and have developed skills to better manage hospital [3–5]. Although evidence suggests that competition affects cost, the reimbursement system of each country must be considered in the interpretation of these findings [6].
Healthcare providers in Korea were reimbursed through a fee-for-service system, since the beginning of the National Health Insurance (NHI). However, several problems arose, including a shortage of facilities and disputes about healthcare costs between insurers and healthcare providers [7]. To solve these problems, the government adopted the diagnosis-related groups (DRG)-based reimbursement system in 1997. After several years of the pilot program, this payment system was applied in 2002 through voluntary participation to seven disease groups in inpatient care: lens surgery, tonsillectomy/adenoidectomy, appendectomy, inguinal/femoral hernia surgery, hemorrhoidectomy, uterine/adnexa surgery and cesarean delivery. Recently, changes in reimbursement were phased in through the mandatory adoption of the DRG system. The DRG system became mandatory in hospitals and clinics on 1 July 2012, and in general hospitals and tertiary hospitals on 1 July 2013.
Other changes among healthcare providers have also occurred during this time period. Over the past decade, the number of healthcare facilities in Korea has increased from 61 776 in 2000 to 84 971 in 2013 [8]. This dramatic change in the number of hospitals has interacted with the political changes; as a result, the level of competition has increased [9, 10]. These changes in competition were intended to improve quality of care as well as inpatient healthcare utilization [11–13]. Less is known, however, about the effects of these changes on outpatient healthcare utilization.
Previous studies have shown that competition has affected healthcare cost. Some studies show that medical expenditures in hospitals located in relatively competitive regions are low [14, 15]. Other studies have reported that medical expenditures are higher in competitive areas [16, 17]. According to Held and Pauly [18], hospitals compete on a quality basis rather than one of price. This theory is consistent with other studies showing that competition is associated with improved quality of healthcare, including readmission, length of stay and mortality [1, 19, 20]. However, the weakness of price competition could lead to over utilization of healthcare services [21]. In particular, price regulation can affect healthcare providers and they can choose other ways to recover some of the lost profit [22]. Since the cost was not flexible under the DRG system, it can be lead to shift care from inpatient to outpatient. Furthermore, these phenomena may be different in healthcare providers which faced with different competitive pressures. Similar studies were conducted in the USA and medical expenditures of hospitals located in relatively competitive area decreased after payment system changes [21, 23]. Other studies have suggested that patient factors related to healthcare utilization and outcome [24–27]. To date, however, there have been few studies on the effects of competition on health service utilization and cost under the DRG payment system [28, 29]. Furthermore, it was questionable whether there was a similar result in Korea, which experienced rapid changes especially in decades.
The aim of this study was to evaluate the effects of competition on outpatient health service utilization following the adoption of the DRG-based payment system in Korea. Since the adoption of DRGs can create incentive to more health service in outpatient care, we examined whether the behavior of hospitals before and after admission differs according to the degree of competition.
Methods
Database and data collection
We used two data set from the NHI claim data. The first data set included hospitalization data from patients admitted from July 2011 to June 2014. The second data set included outpatient data with detailed medical records from each visit. From the first data set, we selected patients who were admitted to the hospital for hemorrhoidectomy (DRG codes: G1020, G1040, G1050 and G1060). We excluded patients who were receiving medical aid, because these patients are not representative of the DRG system in Korea. Patients under 19 years old and hospitals with a low volume of patients (≤50) also were excluded. From the second data set, we selected patients who had visited an outpatient clinic from June 2011 to August 2014. These two data sets were merged for the final analysis to identify patients who were hospitalized for hemorrhoidectomy and had outpatient visits before and after hospitalization. A total of 1185 hospitals were examined in our study to analyze the effects of competition on cost for health services and outpatient visits. A total of 804 884 hospitalizations were included in our analysis.
Variables
The outcome variables included the costs associated with outpatient examinations and the number of outpatient visits within 30 days before and after hospitalization. We matched the patient's major diagnosis at the first hospitalization and outpatient visit. To compute the number of outpatient visits, we observed the number of visits and medical records available for each patient within 30 days before and after hospitalization, which was calculated from the first admission day and discharge day, respectively.
We divided outpatient costs prior to and after hospitalization differently because the DRG reimbursement system covers health services at a fixed cost. To evaluate the change in a specific health service, we divided medical costs into costs associated with basic pre-surgery examinations and other examinations before hospitalization. Basic examinations included laboratory tests, electrocardiograms and chest X-rays. Other examinations included all other examinations, including radiological examinations such as computed tomography. The cost for outpatient visits after hospitalization was calculated per patient within 30 days as the sum of the cost per patient per 30 days. To account for variations in inflation, we adjusted the price forward to 2011 KRW (Korean Won) using an annual conversion factor. In addition, we calculated the average cost per outpatient visit using the following equation: sum of outpatient cost divided by number of outpatient visits per 30 days.
The Hirschmann–Herfindal Index (HHI) was used to reflect the degree of market competition. The HHI was calculated using patient claim data from all hospitals using the following equation.
The HHI is the sum of the squared market share of the hospital under the defined market. Market share was calculated from the total number of patients discharged for hemorrhoidectomy, where i represents each hospital and n is the total number of hospitals in a specific market area. A high HHI indicates either low market competition or a dominant effect of the hospital within the market area. To measure the different effects of market competition, we categorized market competition as high, moderate or low using quartiles of the HHI.
Introduction of the DRG system was divided into before and after the mandatory adoption date based on the type of hospital and the adoption date. Hospital characteristics included the hospital type (tertiary hospital, general hospital, hospital and clinic), teaching status (teaching and non-teaching), size (number of beds), human resources (number of doctors and number of nurses) and hospital location (urban and rural). The Case Mix Index (CMI), which reflects the difference in disease severity across hospitals, was calculated as the sum of the total cost weights of all inpatients per a defined time period divided by the number of admissions. To minimize confounding factors across market area, we adjusted the proportion of Medicaid, gross regional domestic product per capita and population density based on region where hospital is located. Patient characteristics included patient ID, sex, patient clinical complexity level (PCCL, 0, 1, 2) and type of surgery.
Statistical analysis
The distribution of each categorical variable was examined by an analysis of frequencies and percentages, and χ2 tests were performed to examine associations with competition. Analysis of variance was performed to compare average values and standard deviations for continuous variables. To estimate the effects of competition on health service costs, gamma generalized estimating equations based on the log-link function were used to evaluate outpatient health expenditure differences [30]. We used generalized estimating equations model with Poisson regression to evaluate the number of outpatient visits before and after hospitalization. In addition, subgroup analyses were performed according to hospital location. All statistical analyses were performed using SAS statistical software version 9.3 (SAS Institute Inc., Cary, NC, USA); P-values < 0.05 were considered indicative of statistically significant differences.
Results
The data used in this study consisted of 804 884 hospitalizations and 1185 hospitals. The average cost for basic and other examinations was lowest in high-competition areas and highest in low-competition areas. The number of outpatient visits after hospitalization was highest in low-competition areas and lowest in moderate-competition areas (Table 1).
. | (Unit: N/M, %, SD) . | |||
---|---|---|---|---|
High competition . | Moderate competition . | Low competition . | P-value . | |
Main interest | ||||
HHI | 177.14 ± 68.47 | 463.39 ± 96.61 | 967.86 ± 223.65 | <0.0001 |
Outcome variables | ||||
Before hospitalization | ||||
Cost of basic examination for surgery | 7499 ± 10 293 | 9576 ± 12 177 | 10 310 ± 12 161 | <0.0001 |
Cost for other examination | 16 684 ± 22 284 | 21 786 ± 28 581 | 20 265 ± 25 268 | <0.0001 |
Number of outpatient visits | 0.71 ± 0.78 | 0.75 ± 0.79 | 0.78 ± 0.78 | <0.0001 |
After discharge from hospital | ||||
Total cost for outpatient visits | 45 843 ± 41 092 | 44 359 ± 42 405 | 46 793 ± 40 221 | <0.0001 |
Average cost per visit | 12 794 ± 11 309 | 13 244 ± 12 909 | 13 379 ± 10 775 | <0.0001 |
Number of outpatient visits | 3.28 ± 2.38 | 3.12 ± 2.53 | 3.35 ± 2.55 | <0.0001 |
Hospital characteristics (n = 1185) | ||||
Participation of DRG system | ||||
Newly adopted organization | 141 (42.6) | 217 (44.3) | 167 (45.9) | 0.6850 |
Continuously adopted organization | 190 (57.4) | 273 (55.7) | 197 (54.1) | |
Type of hospital | ||||
Clinic | 163 (49.2) | 239 (48.8) | 164 (45.1) | 0.0881 |
Hospital | 90 (27.2) | 106 (21.6) | 95 (26.1) | |
General hospital | 72 (21.8) | 120 (24.5) | 91 (25.0) | |
Tertiary hospital | 6 (1.8) | 25 (5.1) | 14 (3.9) | |
Teaching status | ||||
Teaching | 30 (9.1) | 76 (15.5) | 42 (11.5) | 0.0181 |
Non-teaching | 301 (90.9) | 414 (84.5) | 322 (88.5) | |
Hospital location | ||||
Urban | 298 (90.0) | 479 (97.8) | 302 (83.0) | <0.0001 |
Rural | 33 (10.0) | 11 (2.2) | 62 (17.0) | |
Number of Beds | 162.67 ± 234.63 | 209.73 ± 344.32 | 203.63 ± 255.39 | 0.0589 |
Number of doctors | 28.21 ± 78.34 | 50.39 ± 161.82 | 29.74 ± 79.09 | 0.0107 |
Number of nurses | 54.37 ± 142.94 | 93.47 ± 233.45 | 66.87 ± 145.48 | 0.0086 |
CMI | 1.05 ± 0.36 | 1.05 ± 0.38 | 1.04 ± 0.35 | 0.8026 |
Regional characteristics based on market area | ||||
Proportion of medicaid | 1.81 ± 1.00 | 3.18 ± 1.02 | 4.13 ± 1.77 | <0.0001 |
Population density | 987.26 ± 375.99 | 8455.49 ± 6919.52 | 883.09 ± 1105.63 | <0.0001 |
Per capital GRDP | 24.86 ± 1.66 | 25.75 ± 5.45 | 29.90 ± 12.81 | <0.0001 |
Patient characteristics (n = 804 884) | ||||
Sex | ||||
Male | 107 286 (57.9) | 238 382 (56.9) | 113 046 (57.6) | <0.0001 |
Female | 78 066 (42.1) | 180 463 (43.1) | 83 364 (42.4) | |
Age | 42.23 ± 13.02 | 43.27 ± 13.94 | 43.38 ± 13.72 | <0.0001 |
PCCL | ||||
0 | 182 790 (98.6) | 412 756 (98.6) | 193 833 (98.7) | <0.0001 |
1 | 2350 (1.3) | 5533 (1.3) | 2259 (1.2) | |
2 | 212 (0.1) | 556 (0.1) | 318 (0.2) | |
Introduction of DRG system | ||||
Before | 75 121 (25.6) | 138 190 (47.0) | 80 430 (27.4) | <0.0001 |
After | 110 231 (21.8) | 280 655 (55.4) | 115 980 (22.9) | |
Type of surgery | ||||
Multiple anal procedures | 11 559 (6.2) | 23 392 (5.6) | 8325 (4.2) | <0.0001 |
Other anal procedures | 33 539 (18.1) | 66 581 (15.9) | 27 332 (13.9) | |
Circumferential stampled hemorrhoidectomy | 11 144 (6.0) | 26 632 (6.4) | 15 466 (7.9) | |
Major anal procedures | 129 110 (69.7) | 302 240 (72.2) | 145 287 (74.0) | |
Total | 185 352 (23.2) | 418 845 (52.3) | 196 410 (24.5) |
. | (Unit: N/M, %, SD) . | |||
---|---|---|---|---|
High competition . | Moderate competition . | Low competition . | P-value . | |
Main interest | ||||
HHI | 177.14 ± 68.47 | 463.39 ± 96.61 | 967.86 ± 223.65 | <0.0001 |
Outcome variables | ||||
Before hospitalization | ||||
Cost of basic examination for surgery | 7499 ± 10 293 | 9576 ± 12 177 | 10 310 ± 12 161 | <0.0001 |
Cost for other examination | 16 684 ± 22 284 | 21 786 ± 28 581 | 20 265 ± 25 268 | <0.0001 |
Number of outpatient visits | 0.71 ± 0.78 | 0.75 ± 0.79 | 0.78 ± 0.78 | <0.0001 |
After discharge from hospital | ||||
Total cost for outpatient visits | 45 843 ± 41 092 | 44 359 ± 42 405 | 46 793 ± 40 221 | <0.0001 |
Average cost per visit | 12 794 ± 11 309 | 13 244 ± 12 909 | 13 379 ± 10 775 | <0.0001 |
Number of outpatient visits | 3.28 ± 2.38 | 3.12 ± 2.53 | 3.35 ± 2.55 | <0.0001 |
Hospital characteristics (n = 1185) | ||||
Participation of DRG system | ||||
Newly adopted organization | 141 (42.6) | 217 (44.3) | 167 (45.9) | 0.6850 |
Continuously adopted organization | 190 (57.4) | 273 (55.7) | 197 (54.1) | |
Type of hospital | ||||
Clinic | 163 (49.2) | 239 (48.8) | 164 (45.1) | 0.0881 |
Hospital | 90 (27.2) | 106 (21.6) | 95 (26.1) | |
General hospital | 72 (21.8) | 120 (24.5) | 91 (25.0) | |
Tertiary hospital | 6 (1.8) | 25 (5.1) | 14 (3.9) | |
Teaching status | ||||
Teaching | 30 (9.1) | 76 (15.5) | 42 (11.5) | 0.0181 |
Non-teaching | 301 (90.9) | 414 (84.5) | 322 (88.5) | |
Hospital location | ||||
Urban | 298 (90.0) | 479 (97.8) | 302 (83.0) | <0.0001 |
Rural | 33 (10.0) | 11 (2.2) | 62 (17.0) | |
Number of Beds | 162.67 ± 234.63 | 209.73 ± 344.32 | 203.63 ± 255.39 | 0.0589 |
Number of doctors | 28.21 ± 78.34 | 50.39 ± 161.82 | 29.74 ± 79.09 | 0.0107 |
Number of nurses | 54.37 ± 142.94 | 93.47 ± 233.45 | 66.87 ± 145.48 | 0.0086 |
CMI | 1.05 ± 0.36 | 1.05 ± 0.38 | 1.04 ± 0.35 | 0.8026 |
Regional characteristics based on market area | ||||
Proportion of medicaid | 1.81 ± 1.00 | 3.18 ± 1.02 | 4.13 ± 1.77 | <0.0001 |
Population density | 987.26 ± 375.99 | 8455.49 ± 6919.52 | 883.09 ± 1105.63 | <0.0001 |
Per capital GRDP | 24.86 ± 1.66 | 25.75 ± 5.45 | 29.90 ± 12.81 | <0.0001 |
Patient characteristics (n = 804 884) | ||||
Sex | ||||
Male | 107 286 (57.9) | 238 382 (56.9) | 113 046 (57.6) | <0.0001 |
Female | 78 066 (42.1) | 180 463 (43.1) | 83 364 (42.4) | |
Age | 42.23 ± 13.02 | 43.27 ± 13.94 | 43.38 ± 13.72 | <0.0001 |
PCCL | ||||
0 | 182 790 (98.6) | 412 756 (98.6) | 193 833 (98.7) | <0.0001 |
1 | 2350 (1.3) | 5533 (1.3) | 2259 (1.2) | |
2 | 212 (0.1) | 556 (0.1) | 318 (0.2) | |
Introduction of DRG system | ||||
Before | 75 121 (25.6) | 138 190 (47.0) | 80 430 (27.4) | <0.0001 |
After | 110 231 (21.8) | 280 655 (55.4) | 115 980 (22.9) | |
Type of surgery | ||||
Multiple anal procedures | 11 559 (6.2) | 23 392 (5.6) | 8325 (4.2) | <0.0001 |
Other anal procedures | 33 539 (18.1) | 66 581 (15.9) | 27 332 (13.9) | |
Circumferential stampled hemorrhoidectomy | 11 144 (6.0) | 26 632 (6.4) | 15 466 (7.9) | |
Major anal procedures | 129 110 (69.7) | 302 240 (72.2) | 145 287 (74.0) | |
Total | 185 352 (23.2) | 418 845 (52.3) | 196 410 (24.5) |
Cost: Korea Won (KRW).
GRDP: regional domestic product.
Data represent either the mean ± standard deviation or n (%).
Costs were adjusted for gross price inflation, i.e. as if the gross-to-cost ratio remained constant since 2011.
. | (Unit: N/M, %, SD) . | |||
---|---|---|---|---|
High competition . | Moderate competition . | Low competition . | P-value . | |
Main interest | ||||
HHI | 177.14 ± 68.47 | 463.39 ± 96.61 | 967.86 ± 223.65 | <0.0001 |
Outcome variables | ||||
Before hospitalization | ||||
Cost of basic examination for surgery | 7499 ± 10 293 | 9576 ± 12 177 | 10 310 ± 12 161 | <0.0001 |
Cost for other examination | 16 684 ± 22 284 | 21 786 ± 28 581 | 20 265 ± 25 268 | <0.0001 |
Number of outpatient visits | 0.71 ± 0.78 | 0.75 ± 0.79 | 0.78 ± 0.78 | <0.0001 |
After discharge from hospital | ||||
Total cost for outpatient visits | 45 843 ± 41 092 | 44 359 ± 42 405 | 46 793 ± 40 221 | <0.0001 |
Average cost per visit | 12 794 ± 11 309 | 13 244 ± 12 909 | 13 379 ± 10 775 | <0.0001 |
Number of outpatient visits | 3.28 ± 2.38 | 3.12 ± 2.53 | 3.35 ± 2.55 | <0.0001 |
Hospital characteristics (n = 1185) | ||||
Participation of DRG system | ||||
Newly adopted organization | 141 (42.6) | 217 (44.3) | 167 (45.9) | 0.6850 |
Continuously adopted organization | 190 (57.4) | 273 (55.7) | 197 (54.1) | |
Type of hospital | ||||
Clinic | 163 (49.2) | 239 (48.8) | 164 (45.1) | 0.0881 |
Hospital | 90 (27.2) | 106 (21.6) | 95 (26.1) | |
General hospital | 72 (21.8) | 120 (24.5) | 91 (25.0) | |
Tertiary hospital | 6 (1.8) | 25 (5.1) | 14 (3.9) | |
Teaching status | ||||
Teaching | 30 (9.1) | 76 (15.5) | 42 (11.5) | 0.0181 |
Non-teaching | 301 (90.9) | 414 (84.5) | 322 (88.5) | |
Hospital location | ||||
Urban | 298 (90.0) | 479 (97.8) | 302 (83.0) | <0.0001 |
Rural | 33 (10.0) | 11 (2.2) | 62 (17.0) | |
Number of Beds | 162.67 ± 234.63 | 209.73 ± 344.32 | 203.63 ± 255.39 | 0.0589 |
Number of doctors | 28.21 ± 78.34 | 50.39 ± 161.82 | 29.74 ± 79.09 | 0.0107 |
Number of nurses | 54.37 ± 142.94 | 93.47 ± 233.45 | 66.87 ± 145.48 | 0.0086 |
CMI | 1.05 ± 0.36 | 1.05 ± 0.38 | 1.04 ± 0.35 | 0.8026 |
Regional characteristics based on market area | ||||
Proportion of medicaid | 1.81 ± 1.00 | 3.18 ± 1.02 | 4.13 ± 1.77 | <0.0001 |
Population density | 987.26 ± 375.99 | 8455.49 ± 6919.52 | 883.09 ± 1105.63 | <0.0001 |
Per capital GRDP | 24.86 ± 1.66 | 25.75 ± 5.45 | 29.90 ± 12.81 | <0.0001 |
Patient characteristics (n = 804 884) | ||||
Sex | ||||
Male | 107 286 (57.9) | 238 382 (56.9) | 113 046 (57.6) | <0.0001 |
Female | 78 066 (42.1) | 180 463 (43.1) | 83 364 (42.4) | |
Age | 42.23 ± 13.02 | 43.27 ± 13.94 | 43.38 ± 13.72 | <0.0001 |
PCCL | ||||
0 | 182 790 (98.6) | 412 756 (98.6) | 193 833 (98.7) | <0.0001 |
1 | 2350 (1.3) | 5533 (1.3) | 2259 (1.2) | |
2 | 212 (0.1) | 556 (0.1) | 318 (0.2) | |
Introduction of DRG system | ||||
Before | 75 121 (25.6) | 138 190 (47.0) | 80 430 (27.4) | <0.0001 |
After | 110 231 (21.8) | 280 655 (55.4) | 115 980 (22.9) | |
Type of surgery | ||||
Multiple anal procedures | 11 559 (6.2) | 23 392 (5.6) | 8325 (4.2) | <0.0001 |
Other anal procedures | 33 539 (18.1) | 66 581 (15.9) | 27 332 (13.9) | |
Circumferential stampled hemorrhoidectomy | 11 144 (6.0) | 26 632 (6.4) | 15 466 (7.9) | |
Major anal procedures | 129 110 (69.7) | 302 240 (72.2) | 145 287 (74.0) | |
Total | 185 352 (23.2) | 418 845 (52.3) | 196 410 (24.5) |
. | (Unit: N/M, %, SD) . | |||
---|---|---|---|---|
High competition . | Moderate competition . | Low competition . | P-value . | |
Main interest | ||||
HHI | 177.14 ± 68.47 | 463.39 ± 96.61 | 967.86 ± 223.65 | <0.0001 |
Outcome variables | ||||
Before hospitalization | ||||
Cost of basic examination for surgery | 7499 ± 10 293 | 9576 ± 12 177 | 10 310 ± 12 161 | <0.0001 |
Cost for other examination | 16 684 ± 22 284 | 21 786 ± 28 581 | 20 265 ± 25 268 | <0.0001 |
Number of outpatient visits | 0.71 ± 0.78 | 0.75 ± 0.79 | 0.78 ± 0.78 | <0.0001 |
After discharge from hospital | ||||
Total cost for outpatient visits | 45 843 ± 41 092 | 44 359 ± 42 405 | 46 793 ± 40 221 | <0.0001 |
Average cost per visit | 12 794 ± 11 309 | 13 244 ± 12 909 | 13 379 ± 10 775 | <0.0001 |
Number of outpatient visits | 3.28 ± 2.38 | 3.12 ± 2.53 | 3.35 ± 2.55 | <0.0001 |
Hospital characteristics (n = 1185) | ||||
Participation of DRG system | ||||
Newly adopted organization | 141 (42.6) | 217 (44.3) | 167 (45.9) | 0.6850 |
Continuously adopted organization | 190 (57.4) | 273 (55.7) | 197 (54.1) | |
Type of hospital | ||||
Clinic | 163 (49.2) | 239 (48.8) | 164 (45.1) | 0.0881 |
Hospital | 90 (27.2) | 106 (21.6) | 95 (26.1) | |
General hospital | 72 (21.8) | 120 (24.5) | 91 (25.0) | |
Tertiary hospital | 6 (1.8) | 25 (5.1) | 14 (3.9) | |
Teaching status | ||||
Teaching | 30 (9.1) | 76 (15.5) | 42 (11.5) | 0.0181 |
Non-teaching | 301 (90.9) | 414 (84.5) | 322 (88.5) | |
Hospital location | ||||
Urban | 298 (90.0) | 479 (97.8) | 302 (83.0) | <0.0001 |
Rural | 33 (10.0) | 11 (2.2) | 62 (17.0) | |
Number of Beds | 162.67 ± 234.63 | 209.73 ± 344.32 | 203.63 ± 255.39 | 0.0589 |
Number of doctors | 28.21 ± 78.34 | 50.39 ± 161.82 | 29.74 ± 79.09 | 0.0107 |
Number of nurses | 54.37 ± 142.94 | 93.47 ± 233.45 | 66.87 ± 145.48 | 0.0086 |
CMI | 1.05 ± 0.36 | 1.05 ± 0.38 | 1.04 ± 0.35 | 0.8026 |
Regional characteristics based on market area | ||||
Proportion of medicaid | 1.81 ± 1.00 | 3.18 ± 1.02 | 4.13 ± 1.77 | <0.0001 |
Population density | 987.26 ± 375.99 | 8455.49 ± 6919.52 | 883.09 ± 1105.63 | <0.0001 |
Per capital GRDP | 24.86 ± 1.66 | 25.75 ± 5.45 | 29.90 ± 12.81 | <0.0001 |
Patient characteristics (n = 804 884) | ||||
Sex | ||||
Male | 107 286 (57.9) | 238 382 (56.9) | 113 046 (57.6) | <0.0001 |
Female | 78 066 (42.1) | 180 463 (43.1) | 83 364 (42.4) | |
Age | 42.23 ± 13.02 | 43.27 ± 13.94 | 43.38 ± 13.72 | <0.0001 |
PCCL | ||||
0 | 182 790 (98.6) | 412 756 (98.6) | 193 833 (98.7) | <0.0001 |
1 | 2350 (1.3) | 5533 (1.3) | 2259 (1.2) | |
2 | 212 (0.1) | 556 (0.1) | 318 (0.2) | |
Introduction of DRG system | ||||
Before | 75 121 (25.6) | 138 190 (47.0) | 80 430 (27.4) | <0.0001 |
After | 110 231 (21.8) | 280 655 (55.4) | 115 980 (22.9) | |
Type of surgery | ||||
Multiple anal procedures | 11 559 (6.2) | 23 392 (5.6) | 8325 (4.2) | <0.0001 |
Other anal procedures | 33 539 (18.1) | 66 581 (15.9) | 27 332 (13.9) | |
Circumferential stampled hemorrhoidectomy | 11 144 (6.0) | 26 632 (6.4) | 15 466 (7.9) | |
Major anal procedures | 129 110 (69.7) | 302 240 (72.2) | 145 287 (74.0) | |
Total | 185 352 (23.2) | 418 845 (52.3) | 196 410 (24.5) |
Cost: Korea Won (KRW).
GRDP: regional domestic product.
Data represent either the mean ± standard deviation or n (%).
Costs were adjusted for gross price inflation, i.e. as if the gross-to-cost ratio remained constant since 2011.
Costs for basic examinations prior to hospitalization were lower in high-competition areas and higher in low-competition areas compared with moderate-competition areas, whereas costs for other examinations were lower in high and low-competition areas compared with moderate-competition areas. In addition, the number of outpatient visits within 30 days prior to hospitalization exhibited a similar trend such that the number of visits was lower in high-competition areas and higher in low-competition areas compared with moderate-competition areas (high-competition area rate ratio (RR): 0.984; low-competition area RR: 1.075). Total costs for outpatient visits per 30 days after hospitalization were low in both low and high-competition areas compared with moderate-competition areas. The average cost per outpatient visit was high in both low and high-competition area, but only high competition was statistically significant (RR: 1.040). In addition, the number of outpatient visits after hospitalization was lower in both high low-competition areas (Table 2).
. | RR . | 95% CI . |
---|---|---|
Before hospitalization | ||
Cost of basic examination for surgerya | ||
High competition | 0.880 | 0.876–0.885 |
Moderate competition | 1.000 | – |
Low competition | 1.055 | 1.051–1.059 |
Cost for other examinationa | ||
High competition | 0.960 | 0.953–0.967 |
Moderate competition | 1.000 | – |
Low competition | 0.946 | 0.940–0.952 |
Number of outpatient visitsb | ||
High competition | 0.984 | 0.975–0.994 |
Moderate competition | 1.000 | – |
Low competition | 1.075 | 1.068–1.082 |
After discharge from hospital | ||
Total cost for outpatient visitsa | ||
High competition | 0.927 | 0.921–0.934 |
Moderate competition | 1.000 | – |
Low competition | 0.901 | 0.895–0.906 |
Average cost per visita | ||
High competition | 1.040 | 1.035–1.045 |
Moderate competition | 1.000 | – |
Low competition | 1.001 | 0.997–1.005 |
Number of outpatient visitsb | ||
High competition | 0.870 | 0.865–0.875 |
Moderate competition | 1.000 | – |
Low competition | 0.914 | 0.910–0.919 |
. | RR . | 95% CI . |
---|---|---|
Before hospitalization | ||
Cost of basic examination for surgerya | ||
High competition | 0.880 | 0.876–0.885 |
Moderate competition | 1.000 | – |
Low competition | 1.055 | 1.051–1.059 |
Cost for other examinationa | ||
High competition | 0.960 | 0.953–0.967 |
Moderate competition | 1.000 | – |
Low competition | 0.946 | 0.940–0.952 |
Number of outpatient visitsb | ||
High competition | 0.984 | 0.975–0.994 |
Moderate competition | 1.000 | – |
Low competition | 1.075 | 1.068–1.082 |
After discharge from hospital | ||
Total cost for outpatient visitsa | ||
High competition | 0.927 | 0.921–0.934 |
Moderate competition | 1.000 | – |
Low competition | 0.901 | 0.895–0.906 |
Average cost per visita | ||
High competition | 1.040 | 1.035–1.045 |
Moderate competition | 1.000 | – |
Low competition | 1.001 | 0.997–1.005 |
Number of outpatient visitsb | ||
High competition | 0.870 | 0.865–0.875 |
Moderate competition | 1.000 | – |
Low competition | 0.914 | 0.910–0.919 |
Adjusted for participation in the DRG system, type of hospital, teaching status, hospital location, number of beds, number of doctors, number of nurses, CMI, proportion of Medicaid, population density, per capital regional domestic product, age, sex, PCCL, introduction of DRG system and type of surgery.
Costs were adjusted for gross price inflation, i.e. as if the gross-to-cost ratio remained constant since 2011.
RR/95% CI: RR is indicated the results of exponentiated estimates and interpretable as percentage changes.
aCoefficients for cost represent the results of generalized estimating equations with a gamma distribution.
bCoefficients for number of outpatient visits represent the results of Poisson regression models.
. | RR . | 95% CI . |
---|---|---|
Before hospitalization | ||
Cost of basic examination for surgerya | ||
High competition | 0.880 | 0.876–0.885 |
Moderate competition | 1.000 | – |
Low competition | 1.055 | 1.051–1.059 |
Cost for other examinationa | ||
High competition | 0.960 | 0.953–0.967 |
Moderate competition | 1.000 | – |
Low competition | 0.946 | 0.940–0.952 |
Number of outpatient visitsb | ||
High competition | 0.984 | 0.975–0.994 |
Moderate competition | 1.000 | – |
Low competition | 1.075 | 1.068–1.082 |
After discharge from hospital | ||
Total cost for outpatient visitsa | ||
High competition | 0.927 | 0.921–0.934 |
Moderate competition | 1.000 | – |
Low competition | 0.901 | 0.895–0.906 |
Average cost per visita | ||
High competition | 1.040 | 1.035–1.045 |
Moderate competition | 1.000 | – |
Low competition | 1.001 | 0.997–1.005 |
Number of outpatient visitsb | ||
High competition | 0.870 | 0.865–0.875 |
Moderate competition | 1.000 | – |
Low competition | 0.914 | 0.910–0.919 |
. | RR . | 95% CI . |
---|---|---|
Before hospitalization | ||
Cost of basic examination for surgerya | ||
High competition | 0.880 | 0.876–0.885 |
Moderate competition | 1.000 | – |
Low competition | 1.055 | 1.051–1.059 |
Cost for other examinationa | ||
High competition | 0.960 | 0.953–0.967 |
Moderate competition | 1.000 | – |
Low competition | 0.946 | 0.940–0.952 |
Number of outpatient visitsb | ||
High competition | 0.984 | 0.975–0.994 |
Moderate competition | 1.000 | – |
Low competition | 1.075 | 1.068–1.082 |
After discharge from hospital | ||
Total cost for outpatient visitsa | ||
High competition | 0.927 | 0.921–0.934 |
Moderate competition | 1.000 | – |
Low competition | 0.901 | 0.895–0.906 |
Average cost per visita | ||
High competition | 1.040 | 1.035–1.045 |
Moderate competition | 1.000 | – |
Low competition | 1.001 | 0.997–1.005 |
Number of outpatient visitsb | ||
High competition | 0.870 | 0.865–0.875 |
Moderate competition | 1.000 | – |
Low competition | 0.914 | 0.910–0.919 |
Adjusted for participation in the DRG system, type of hospital, teaching status, hospital location, number of beds, number of doctors, number of nurses, CMI, proportion of Medicaid, population density, per capital regional domestic product, age, sex, PCCL, introduction of DRG system and type of surgery.
Costs were adjusted for gross price inflation, i.e. as if the gross-to-cost ratio remained constant since 2011.
RR/95% CI: RR is indicated the results of exponentiated estimates and interpretable as percentage changes.
aCoefficients for cost represent the results of generalized estimating equations with a gamma distribution.
bCoefficients for number of outpatient visits represent the results of Poisson regression models.
According to the subgroup analysis by hospital location revealed that costs for basic examinations prior to surgery were similar in urban and rural settings, but costs for other examinations were different by location. The number of outpatient visits before hospitalization was higher in urban low-competition areas compared with moderate areas (RR: 1.078, 95% CI [confidence interval]: 1.071–1.085). Costs for outpatient visits after hospitalization were higher in rural high-competition areas compared with moderate areas (RR: 1.842, 95% CI: 1.086–3.121). The average cost per visit in rural areas was high in both low and high-competition areas. The number of outpatient visits after hospitalization exhibited a similar trend (Table 3).
. | Hospital location . | |||
---|---|---|---|---|
Urban . | Rural . | |||
RR . | 95% CI . | RR . | 95% CI . | |
Before hospitalization | ||||
Cost of basic examination for surgerya | ||||
High competition | 0.880 | 0.886–0.885 | 0.948 | 0.918–0.979 |
Moderate competition | 1.00 | – | 1.00 | – |
Low competition | 1.026 | 1.022–1.030 | 0.999 | 0.970–1.030 |
Cost for other examinationa | ||||
High competition | 0.962 | 0.954–0.969 | 1.032 | 0.968–1.101 |
Moderate competition | 1.00 | – | 1.00 | – |
Low competition | 0.945 | 0.939–0.951 | 0.960 | 0.906–1.017 |
Number of outpatient visitsb | ||||
High competition | 0.984 | 0.975–0.994 | 0.917 | 0.850–0.990 |
Moderate competition | 1.00 | – | 1.00 | – |
Low competition | 1.078 | 1.071–1.085 | 0.884 | 0.821–0.951 |
After discharge from hospital | ||||
Total cost for outpatient visitsa | ||||
High competition | 0.926 | 0.920–0.933 | 1.842 | 1.086–3.121 |
Moderate competition | 1.00 | – | 1.00 | – |
Low competition | 0.898 | 0.892–0.903 | 1.559 | 0.469–5.184 |
Average cost per visita | ||||
High competition | 1.033 | 1.028–1.038 | 1.191 | 1.116–1.271 |
Moderate competition | 1.00 | – | 1.00 | – |
Low competition | 0.999 | 0.995–1.003 | 1.160 | 1.089–1.234 |
Number of outpatient visitsb | ||||
High competition | 0.874 | 0.869–0.879 | 1.103 | 1.016–1.198 |
Moderate competition | 1.00 | – | 1.00 | – |
Low competition | 0.911 | 0.907–0.916 | 1.391 | 1.294–1.496 |
. | Hospital location . | |||
---|---|---|---|---|
Urban . | Rural . | |||
RR . | 95% CI . | RR . | 95% CI . | |
Before hospitalization | ||||
Cost of basic examination for surgerya | ||||
High competition | 0.880 | 0.886–0.885 | 0.948 | 0.918–0.979 |
Moderate competition | 1.00 | – | 1.00 | – |
Low competition | 1.026 | 1.022–1.030 | 0.999 | 0.970–1.030 |
Cost for other examinationa | ||||
High competition | 0.962 | 0.954–0.969 | 1.032 | 0.968–1.101 |
Moderate competition | 1.00 | – | 1.00 | – |
Low competition | 0.945 | 0.939–0.951 | 0.960 | 0.906–1.017 |
Number of outpatient visitsb | ||||
High competition | 0.984 | 0.975–0.994 | 0.917 | 0.850–0.990 |
Moderate competition | 1.00 | – | 1.00 | – |
Low competition | 1.078 | 1.071–1.085 | 0.884 | 0.821–0.951 |
After discharge from hospital | ||||
Total cost for outpatient visitsa | ||||
High competition | 0.926 | 0.920–0.933 | 1.842 | 1.086–3.121 |
Moderate competition | 1.00 | – | 1.00 | – |
Low competition | 0.898 | 0.892–0.903 | 1.559 | 0.469–5.184 |
Average cost per visita | ||||
High competition | 1.033 | 1.028–1.038 | 1.191 | 1.116–1.271 |
Moderate competition | 1.00 | – | 1.00 | – |
Low competition | 0.999 | 0.995–1.003 | 1.160 | 1.089–1.234 |
Number of outpatient visitsb | ||||
High competition | 0.874 | 0.869–0.879 | 1.103 | 1.016–1.198 |
Moderate competition | 1.00 | – | 1.00 | – |
Low competition | 0.911 | 0.907–0.916 | 1.391 | 1.294–1.496 |
Adjusted for participation in the DRG system, type of hospital, teaching status, hospital location, number of beds, number of doctors, number of nurses, CMI, proportion of Medicaid, population density, per capital regional domestic product, age, sex, PCCL, introduction of DRG system and type of surgery.
Costs were adjusted for gross price inflation, i.e. as if the gross-to-cost ratio remained constant since 2011.
RR is indicated the results of exponentiated estimates and interpretable as percentage changes.
aCoefficients for cost represent the results of generalized estimating equations with a gamma distribution.
bCoefficients for number of outpatient visits represent the results of Poisson regression models.
. | Hospital location . | |||
---|---|---|---|---|
Urban . | Rural . | |||
RR . | 95% CI . | RR . | 95% CI . | |
Before hospitalization | ||||
Cost of basic examination for surgerya | ||||
High competition | 0.880 | 0.886–0.885 | 0.948 | 0.918–0.979 |
Moderate competition | 1.00 | – | 1.00 | – |
Low competition | 1.026 | 1.022–1.030 | 0.999 | 0.970–1.030 |
Cost for other examinationa | ||||
High competition | 0.962 | 0.954–0.969 | 1.032 | 0.968–1.101 |
Moderate competition | 1.00 | – | 1.00 | – |
Low competition | 0.945 | 0.939–0.951 | 0.960 | 0.906–1.017 |
Number of outpatient visitsb | ||||
High competition | 0.984 | 0.975–0.994 | 0.917 | 0.850–0.990 |
Moderate competition | 1.00 | – | 1.00 | – |
Low competition | 1.078 | 1.071–1.085 | 0.884 | 0.821–0.951 |
After discharge from hospital | ||||
Total cost for outpatient visitsa | ||||
High competition | 0.926 | 0.920–0.933 | 1.842 | 1.086–3.121 |
Moderate competition | 1.00 | – | 1.00 | – |
Low competition | 0.898 | 0.892–0.903 | 1.559 | 0.469–5.184 |
Average cost per visita | ||||
High competition | 1.033 | 1.028–1.038 | 1.191 | 1.116–1.271 |
Moderate competition | 1.00 | – | 1.00 | – |
Low competition | 0.999 | 0.995–1.003 | 1.160 | 1.089–1.234 |
Number of outpatient visitsb | ||||
High competition | 0.874 | 0.869–0.879 | 1.103 | 1.016–1.198 |
Moderate competition | 1.00 | – | 1.00 | – |
Low competition | 0.911 | 0.907–0.916 | 1.391 | 1.294–1.496 |
. | Hospital location . | |||
---|---|---|---|---|
Urban . | Rural . | |||
RR . | 95% CI . | RR . | 95% CI . | |
Before hospitalization | ||||
Cost of basic examination for surgerya | ||||
High competition | 0.880 | 0.886–0.885 | 0.948 | 0.918–0.979 |
Moderate competition | 1.00 | – | 1.00 | – |
Low competition | 1.026 | 1.022–1.030 | 0.999 | 0.970–1.030 |
Cost for other examinationa | ||||
High competition | 0.962 | 0.954–0.969 | 1.032 | 0.968–1.101 |
Moderate competition | 1.00 | – | 1.00 | – |
Low competition | 0.945 | 0.939–0.951 | 0.960 | 0.906–1.017 |
Number of outpatient visitsb | ||||
High competition | 0.984 | 0.975–0.994 | 0.917 | 0.850–0.990 |
Moderate competition | 1.00 | – | 1.00 | – |
Low competition | 1.078 | 1.071–1.085 | 0.884 | 0.821–0.951 |
After discharge from hospital | ||||
Total cost for outpatient visitsa | ||||
High competition | 0.926 | 0.920–0.933 | 1.842 | 1.086–3.121 |
Moderate competition | 1.00 | – | 1.00 | – |
Low competition | 0.898 | 0.892–0.903 | 1.559 | 0.469–5.184 |
Average cost per visita | ||||
High competition | 1.033 | 1.028–1.038 | 1.191 | 1.116–1.271 |
Moderate competition | 1.00 | – | 1.00 | – |
Low competition | 0.999 | 0.995–1.003 | 1.160 | 1.089–1.234 |
Number of outpatient visitsb | ||||
High competition | 0.874 | 0.869–0.879 | 1.103 | 1.016–1.198 |
Moderate competition | 1.00 | – | 1.00 | – |
Low competition | 0.911 | 0.907–0.916 | 1.391 | 1.294–1.496 |
Adjusted for participation in the DRG system, type of hospital, teaching status, hospital location, number of beds, number of doctors, number of nurses, CMI, proportion of Medicaid, population density, per capital regional domestic product, age, sex, PCCL, introduction of DRG system and type of surgery.
Costs were adjusted for gross price inflation, i.e. as if the gross-to-cost ratio remained constant since 2011.
RR is indicated the results of exponentiated estimates and interpretable as percentage changes.
aCoefficients for cost represent the results of generalized estimating equations with a gamma distribution.
bCoefficients for number of outpatient visits represent the results of Poisson regression models.
Discussion
An increase in the number of hospitals in limited market areas as well as changes to health policies have increased market competition in Korea. Structural changes resulting from the introduction of the DRG system can also affect the behavior of healthcare providers and can lead to cost shifting. In addition, this phenomenon differs in relation to the degree of market power [31]. Thus, we investigated the effects of competition on outpatient healthcare utilization before and after hospitalization.
In our study, outpatient care, including visit, pre-surgery examination and costs, varies by the degree of competition in the area where hospital was located. With regard to outpatient care in before hospitalization, we found that hospital located higher competitive area is associated with lower costs and utilization. These results are similar to previous researches in which hospitals located in highly competitive area reduced growth rate of patients care following the changes in reimbursement systems [21, 23]. According to the theory of cost-shift, change in the payment system is partially responsible for the increase in outpatient care. This is because, under the public healthcare system, cost shifting can occur between inpatient and outpatient care such as volume shift or spillover [32]. However, the role of market structure affect to hospital margins, this phenomenon depends on various levels of market competition. Cost shifting is limited by hospital competition and, therefore, hospitals in more competitive markets have a smaller effect than less competitive market [33]. This may associated with the reduction of outpatient costs for examination and the number of visits. On the other hand, hospitals located in less competitive markets can change their behavior by increasing outpatient care for profit. This may occur regardless of whether the DRG-based payment system is reimbursed to hospital adequate or inadequate to cover the treatment costs for inpatients [34]. As a result, this may affect to increase in outpatient care in hospital located low-competitive area.
Regarding outpatient care after hospitalization, we found that costs for outpatient visits and number of outpatient visits within 30 days were lower in both low- and high-competition areas compared with moderate-competition areas. However, the average costs per visit increased in area of high competition. These results may be related to a decrease in the number of outpatient visits after hospitalization. In general, most of the patients were do not want to visit the hospital often after hospitalization. Also, from a hospital perspective, it is generally more desirable to increase the cost per hospital visits than to increase the number of visits. As a result, the cost per visits after hospitalization increased, but the total costs may be lower due to the lower total number of visits. However, this trend was similar in both low- and high-competition areas compared with moderate competition. Since the distribution of Korean hospitals is very different, we conducted further analysis based on hospital location.
The results of the subgroup analysis revealed that the effects of competition on outpatients care were different by hospital location. Especially, hospitals located in rural area had different trend compared with our main results. The number of outpatient visits before hospitalization were higher in rural low-competition areas compared with moderate-competition areas. The association of this phenomenon may related to limited accessibility to the hospital. Because the number of hospitals located in urban areas was almost double the number of hospitals in rural areas in our study, limited accessibility may be associated with a decrease in outpatient visits in before hospitalization. However, outpatient visits have changed after hospitalization. Once patients discharge from the hospital, patients at rural hospitals areas may demand more visits from the hospital; hospitals located in rural area are less accessible, and hospitals may require more visits to patients. In addition, these hospitals may have to increase costs per outpatient visits to offset potential decreases in profit. These results may in turn lead to increased costs for total costs for outpatient care in rural area regardless the degree of competition.
Cost shifting can occur under the cost-containment policies, but the results were depends on the degree of market competition. In our study, cost shifting was existed in two aspects before and after hospitalization. Before hospitalization, hospitals located in less competitive areas increased pre-surgery examinations in outpatient care. After discharge from hospital, the number of visits decreased in both low- and high-competition area, but the average cost per visit increased. In addition, this phenomenon was different by hospital location. Because, most of hospitals were concentrated in urban area, there was a great disparity in the distribution of hospitals in Korea; 53.5% of hospitals were located in metropolitan area, and one-fourth among all hospitals were concentrated in the capital area. This can have a different impact on hospital behavior under the DRG system, especially hospitals located in rural area may be more affected than those in urban area. As a result, costs shifting occurs in hospitals located in rural area, regardless of competitive status. Our results provide evidence to policy makers that cost shifting was impacted by the degree of competition and hospital location. Since the DRG system has been introduced in Korea to reduce growing health expenditure, we need to assess changes in healthcare utilization to determine whether these changes have increased additional spending. In particular, hospitals located in rural areas need further evaluation to reduce unintended expenditure on outpatient care. Furthermore, hospital regulations will be needed to reduce concentration in urban areas and cost shifting in rural areas. Therefore, further studies would be needed to evaluate different effects of competition on hospital under the DRG system.
Our study had several limitations. First, we used claim data, which did not include certain patient characteristics that may affect health service utilization, such as education level or income level. Second, our study included patients admitted for hemorrhoids only. Results may differ for other diseases reimbursed by the DRG system. Third, we lacked an official definition of the hospital market in Korea; hence, our study relied on administrative districts as markets. Because our markets were defined as geographical areas, further studies with official market designations are required. Finally, we did not evaluate non-payment items, which were not included in our data set. Thus, we were unable to measure the absolute growth of outpatient expenditures and other undocumented examinations.
Despite these limitations, our study had several strengths. First, the NHI claim data included information from almost all patients and hospitals in Korea. Thus, the results are representative of the whole nation. Second, to the best of our knowledge, our study is the first to evaluate outpatient health service utilization following the mandatory introduction of the DRG system in Korea. Third, we investigated the effects of competition on health service utilization and outpatient visits, which revealed several important factors to evaluating cost shifting under DRG system. Finally, our study examined changes in hospitals by market competition, and provide policy makers with information to improve health efficiency in hospital under the DRG system.
In conclusion, our study revealed a differential effect of competition on health service utilization. In general, there was no increase in outpatient care in hospitals in high-competition areas under the DRG system. However, these results were changed by hospital location, and the increase of outpatient care was observed in the hospitals located in rural area, regardless of competition status. Thus, policy makers should consider characteristics of competitive status as well as hospital location when evaluating cost shifting in outpatient care.
Funding
None.