Hostname: page-component-586b7cd67f-l7hp2 Total loading time: 0 Render date: 2024-11-28T08:58:52.292Z Has data issue: false hasContentIssue false
  • English
  • Français

Market competition, ownership, payment systems and the performance of health care providers – a panel study among Finnish occupational health services providers

Published online by Cambridge University Press:  12 October 2012

Eila Kankaanpää ,
Ismo Linnosmaa  and
Hannu Valtonen
Eila Kankaanpää*
Affiliation:
Department of Health and Social Management, University of Eastern Finland, Kuopio, Finland
Ismo Linnosmaa
Affiliation:
Centre for Health and Social Economics, National Institute for Health and Welfare, Helsinki, Finland
Hannu Valtonen
Affiliation:
Department of Health and Social Management, University of Eastern Finland, Kuopio, Finland
*
*Correspondence to: Eila Kankaanpää, Department of Health and Social Management, University of Eastern Finland, POB 1627, FIN-70711 Kuopio, Finland. Email: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

Many health care reforms rely on competition although health care differs in many respects from the assumptions of perfect competition. Finnish occupational health services provide an opportunity to study empirically competition, ownership and payment systems and the performance of providers. In these markets employers (purchasers) choose the provider and prices are market determined. The price regulation of public providers was abolished in 1995. We had data on providers from 1992, 1995, 1997, 2000 and 2004. The unbalanced panel consisted of 1145 providers and 4059 observations. Our results show that in more competitive markets providers in general offered a higher share of medical care compared to preventive services. The association between unit prices and revenues and market environment varied according to the provider type. For-profit providers had lower prices and revenues in markets with numerous providers. The public providers in more competitive regions were more sensitive to react to the abolishment of their price regulation by raising their prices. Employer governed providers had weaker association between unit prices or revenues and competition. The market share of for-profit providers was negatively associated with productivity, which was the only sign of market spillovers we found in our study.

Type
Articles
Information
Health Economics, Policy and Law , Volume 8 , Issue 4 , October 2013 , pp. 477 - 510
Copyright
Copyright © Cambridge University Press 2012 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Aletras, V. H. (1999), ‘A comparison of hospital scale effects in short-run and long-run cost functions’, Health Economics, 8: 521–530.3.0.CO;2-G>CrossRefGoogle ScholarPubMed
Baltagi, B. H. (2008), Econometric Analysis of Panel Data, Hoboken, NJ: John Wiley & Sons Inc.Google Scholar
Cabral, L. M. B. (2002), Introduction to Industrial Organization, 2nd edition, Cambridge, MA: MIT Press.Google Scholar
Capps, C., Dranove, D.Satterthwaite, M. (2003), ‘Competition and market power in option demand markets’, RAND Journal of Economics, 34: 737–763.CrossRefGoogle ScholarPubMed
Chalkley, M.Malcomson, J. M. (2000), ‘Government Purchasing of Health Services’, in A. J. Culyer and J. P. Newhouse (eds), Handbook of Health Economics, vol. 1, Amsterdam: Elsevier, 848–890.Google Scholar
Christensen, E. W. (2004), ‘Scale and scope economies in nursing homes: a quantile regression approach’, Health Economics, 13: 363–377.Google Scholar
Dougherty, C. (2007), Introduction to Econometrics, 3rd edition, Oxford, UK: Oxford University Press.Google Scholar
Eggleston, K., Shen, Y., Lau, J., Schmid, C. H.Chan, J. (2008), ‘Hospital ownership and quality of care: what explains the different results in the literature?’, Health Economics, 17: 1345–1362.Google Scholar
Evans, W. N., Froeb, L. M.Werden, G. J. (1993), ‘Endogeneity in the concentration–price relationship: causes, consequences, and cures’, Journal of Industrial Economics, 41: 431–438.CrossRefGoogle Scholar
Gaynor, M.Haas-Wilson, D. (1999), ‘Change, consolidation, and competition in health care markets’, Journal of Economic Perspectives, 13: 141–164.CrossRefGoogle ScholarPubMed
Gaynor, M., Town, R. J. (2011), ‘Competition in Health Care Markets’, National Bureau of Economic Research Working Paper Series, No. 17208.Google Scholar
Gaynor, M., Moreno-Serra, R., Propper, C. (2010), ‘Death by Market Power: Reform, Competition and Patient Outcomes in the National Health Service’, National Bureau of Economic Research Working Paper Series, No. 16164.Google Scholar
Glennerster, H. (1998), ‘Competition and quality in health care: the UK experience’, International Journal for Quality in Health Care, 10: 403–410.Google Scholar
Gosden, T., Forland, F., Kristiansen, I. S., Sutton, M., Leese, B., Giuffrida, A., Sergison, M.Pedersen, L. (2001), ‘Impact of payment method on behaviour of primary care physicians: a systematic review’, Journal of Health Services Research and Policy, 6: 44–55.Google Scholar
Grabowski, D. C.Hirth, R. A. (2003), ‘Competitive spillovers across non-profit and for-profit nursing homes’, Journal of Health Economics, 22: 1–22.Google Scholar
Greene, W. H. (2003), Econometric analysis, 5th edition, Upper Saddle River, NJ: Prentice Hall.Google Scholar
Hämäläinen, R., Husman, K., Räsänen, K., Westerholm, P.Rantanen, J. (2001), Survey or the Quality and Effectiveness of Occupational Health Services in the European Union and Norway and Switzerland, vol. 45. Helsinki: Finnish Institute of Occupational Health.Google Scholar
Hart, O. (1995), Firms, Contracts and Financial Structure, Oxford: Clarendon Press.Google Scholar
Horwitz, J. R.Nichols, A. (2009), ‘Hospital ownership and medical services: market mix, spillover effects, and nonprofit objectives’, Journal of Health Economics, 28: 924–937.Google Scholar
Horwitz, J. R.Nichols, A. (2011), ‘Rural hospital ownership: medical service provision, market mix, and spillover effects’, Health Services Research, 46: 1452–1472.Google Scholar
Kansaneläkelaitos (Social Insurance Institution) (2007), Kelan työterveyshuoltotilasto 2005 (Statistics on Occupational Health Services 2005), Helsinki: Kansaneläkelaitos.Google Scholar
Kansaneläkelaitos (The Social Insurance Institution) (2009), Kelan Työterveyshuoltotilasto 2007 (Statistics on Occupational Health Services 2007), Helsinki: Kansaneläkelaitos.Google Scholar
Keeler, E. B., Melnick, G.Zwanziger, J. (1999), ‘The changing effects of competition on non-profit and for-profit hospital pricing behavior’, Journal of Health Economics, 18: 69–86.Google Scholar
Kessler, D. P.McClellan, M. B. (2000), ‘Is hospital competition socially wasteful?’, The Quarterly Journal of Economics, 115: 577–615.Google Scholar
Kessler, D. P.McClellan, M. B. (2002), ‘The effects of hospital ownership on medical productivity’, RAND Journal of Economics, 33: 488–506.CrossRefGoogle ScholarPubMed
Kornai, J., Maskin, E.Roland, G. (2003), ‘Understanding the soft budget constraint’, Journal of Economic Literature, 41: 1095–1136.Google Scholar
Maarse, H., Rathwell, T. A., Evetovits, T., Preker, A. S.Jakubowski, E. (2005), ‘Responding to Purchasing: Provider Perspectives’, in J. Figueras, R. Robinson, and E. Jakubowski (eds), Purchasing to Improve Health Systems Performance, Maidenhead: Open University Press, 265–287.Google Scholar
Magnussen, J., Vrangbæk, K.Saltman, R. B. (2009), Nordic Health Care Systems: Recent Reforms and Current Policy Challenges, Berkshire: Open University Press.Google Scholar
Manninen, P. (2009), Työterveyshuolto Suomessa vuonna 2007 ja kehitystrendi 1997–2007. (Finnish Occupational Health Services in 2007 and Time Trend 1997–2007), Helsinki: Työterveyslaitos (Finnish Institute of Occupational Health).Google Scholar
Nickell, S. J. (1996), ‘Competition and corporate performance’, Journal of Political Economy, 104: 724–746.Google Scholar
Oliver, A. (2005), ‘The english National Health Service: 1979–2005’, Health Economics, 14: S75–S99.Google Scholar
Oliver, A.Mossialos, E. (2005), ‘European health systems reforms: looking backward to see forward?’, Journal of Health Politics, Policy and Law, 30: 7–28.CrossRefGoogle ScholarPubMed
Peurala, M., Manninen, P., Perkiö-Mäkelä, M., Kankaanpää, E.Husman, K. (2007), ‘Työterveyshuolto ja palvelujen käyttö (The Usage of Occupational Health Services)’, in T. Kauppinen, R. Hanhela, P. Heikkilä, A. Kasvio, S. Lehtinen, K. Lindström, J. Toikkanen and A. Tossavainen (eds), Työ ja terveys Suomessa 2006 (Work and Health in Finland in 2006), Helsinki: Työterveyslaitos, 246–262.Google Scholar
Potter, S. J. (2001), ‘A longitudinal analysis of the distinction between for-profit and not-for-profit hospitals in America’, Journal of Health and Social Behavior, 42: 17–44.Google Scholar
Propper, C., Burgess, S.Green, K. (2004), ‘Does competition between hospitals improve the quality of care?: Hospital death rates and the NHS internal market’, Journal of Public Economics, 88: 1247–1272.Google Scholar
Propper, C., Burgess, S.Gossage, D. (2008), ‘Competition and quality: evidence from the NHS internal market 1991–9’, The Economic Journal, 118: 138–170.Google Scholar
Rosenman, R.Friesner, D. (2004), ‘Scope and scale inefficiencies in physician practices’, Health Economics, 13: 1091–1116.Google Scholar
Santerre, R. E.Vernon, J. A. (2006), ‘The consumer welfare implications of the hospital ownership mix in the US: an exploratory study’, Health Economics, 15: 1187–1199.Google Scholar
Sari, N. (2002), ‘Do competition and managed care improve quality?’, Health Economics, 11: 571–584.Google Scholar
Shen, Y., Eggleston, K., Lau, J., Schmid, C. (2005), ‘Hospital Ownership and Financial Performance: a Quantitative Research Review’, Working paper 11662, Cambridge, MA: National Bureau of Economic Research.Google Scholar
Shen, Y., Eggleston, K., Lau, J.Schmid, C. H. (2007), ‘Hospital ownership and financial performance: What explains the different findings in the empirical literature?’, Inquiry, 44: 41–68.CrossRefGoogle ScholarPubMed
Stock, J. H.Watson, M. W. (2007), Introduction to Econometrics, 2nd edition, Boston, MA: Pearson/Addison Wesley.Google Scholar
Wholey, D., Feldman, R., Christianson, J. B.Engberg, J. (1996), ‘Scale and scope economies among health maintenance organizations’, Journal of Health Economics, 15: 657–684.Google Scholar
Wong, H. S., Zhan, C., Mutter, R. (2005), ‘Do different measures of hospital competition matter in empirical investigations of hospital behavior?’, Review of Industrial Organization, 26: 61–87.Google Scholar