Trends and regional variation in rates of orthopaedic surgery in Germany: the impact of competition

Natalie Baier (), Lisa-Marie Sax and Leonie Sundmacher
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Natalie Baier: Technische Universität Berlin
Lisa-Marie Sax: City University London
Leonie Sundmacher: Ludwig-Maximilians-Universität München

The European Journal of Health Economics, 2019, vol. 20, issue 1, No 12, 163-174

Abstract: Abstract Competition in hospital services has been fostered in an increasing number of OECD countries with the goal that hospitals improve quality and/or efficiency. With the same intention competition has been promoted in Germany when introducing a system of prospective payments based on diagnosis-related groups (DRGs) in 2003. Beyond its intended effects, however, the reform led to a substantial increase in hospital activity, particularly for orthopaedic surgery. To shed more light on these developments, this paper analyses the relationship between the rates of certain orthopaedic surgical procedures and hospital competition across and within each of Germany’s 402 districts. We measured competition with the Herfindahl–Hirschman Index (HHI) based on market shares for hip replacements, knee replacements and spine surgeries. Using spatial panel regression, which allows for spatial dependency and unobserved individual heterogeneity, we found that the rate of hip and knee replacements rose as market concentration increased. A potential explanation might be that hospitals specialize in these particular procedures.

Keywords: Orthopaedic surgery; Regional variation; Spatial panel regression; Hospital competition; Germany (search for similar items in EconPapers)
JEL-codes: C23 I11 I18 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s10198-018-0990-2

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