In standard economic theory, competitive markets are thought to produce the optimal allocation of resources through their use of pricing signals; but U.S. hospitals have long argued that competition is antithetical to their successful operation, given the unique characteristics of hospital markets, which include natural barriers to entry and hospitals’ safety-net and medical-teaching roles.
This paper examines these core questions of competition in hospital markets as they relate to New York State, particularly in light of the state’s ongoing Medicaid-reform efforts: it explores the implications of hospital consolidation in the Empire State for public payers, commercial payers, and patients—in terms of outcomes and costs.
Read Full Article »