Do health insurance and hospital market concentration influence hospital patients' experience of care?

Objective: To examine the effects of insurance and hospital market concentration on hospital patients' experience of care, as hospitals may compete on quality for favorable insurance contracts.

Data Sources/study Setting: Secondary data for 2008-2015 on patient experience from Hospital Compare's patient survey data, hospital characteristics from the American Hospital Association (AHA) Annual Survey, and insurance market characteristics from HealthLeaders-InterStudy.

Study Design: Hospital/year-level regressions predict each hospital's patient experience measure as a function of insurance and hospital market concentration and hospital fixed effects. The model is identified by longitudinal variation in insurance and hospital concentration.

Data Collection/extraction Methods: Hospital/year-level data from Hospital Compare and the AHA merged by market/year to insurance and hospital concentration measures.

Principal Findings: Changes in patient satisfaction are positively associated with increases in insurance concentration and negatively associated with increases in hospital concentration. Moving from a market with 20th percentile insurance concentration and 80th percentile hospital concentration to a market with 80th percentile insurance concentration and 20th percentile hospital concentration increases the share of patients that rated the hospital highly from 66.9 percent (95% CI: 66.5-67.2 percent) to 67.9 percent (95% CI: 67.5-68.3 percent) and the share of patients that definitely recommend the hospital from 69.7 percent (95% CI: 69.4-70.0 percent) to 70.8 percent (95% CI: 70.5-71.2 percent). The relationship for insurance concentration is stronger in more concentrated hospital markets, while the relationship for hospital concentration is stronger in less concentrated hospital markets.

Conclusions: These findings add to the evidence on the harms of hospital consolidation but suggest that insurer consolidation may improve patient experience.