Hospital competition and health outcomes: Evidence from acute myocardial infarction admissions in Germany

Abstract

Countries increasingly rely on competition among hospitals to improve health outcomes. However, there is limited empirical evidence on the effect of competition on health outcomes in Germany. We examined the effect of hospital competition on quality of care, which is assessed using health outcomes (risk-adjusted in-hospital and post-hospitalization mortality and cardiac-related readmissions), focusing on acute myocardial infarction (AMI) treatment. We obtained data on all hospital utilizations and mortality of 13.2% of the population from a large statutory health insurer and all AMI admission records from Diagnosis-Related Groups Statistic from 2015-19. We constructed the measures of hospital competition, which mitigates the possibility of endogeneity bias. The relationships between health outcomes and competition measures are estimated using linear probability models. Intense competition was associated with lower quality of care in terms of mortality and cardiac-related readmissions. Patients treated in hospitals facing high competition were 0.9 (1.2) percentage points more likely to die within 90 days (2 years) of admission, and 1.4 (1.6) percentage points more likely to be readmitted within 90 days (2 years) of discharge than patients treated in hospitals facing low competition. Our results indicate that hospital competition does not lead to better health outcomes for AMI patients in Germany. Therefore, additional measures are necessary to achieve quality improvement.