Segmentation in local hospital markets.

Abstract:

:This study examines evidence of market segmentation on the basis of patients' insurance status, demographic characteristics, and medical condition in selected local markets in California in the years 1983 and 1989. Substantial differences exist in the probability patients may be admitted to particular hospitals based on insurance coverage, particularly Medicaid, and race. Segmentation based on insurance and race is related to hospital characteristics, but not the characteristics of the hospital's community. Medicaid patients are more likely to go to hospitals with lower costs and fewer service offerings. Privately insured patients go to hospitals offering more services, although cost concerns are increasing. Hispanic patients also go to low-cost hospitals, ceteris paribus. Results indicate little evidence of segmentation based on medical condition in either 1983 or 1989, suggesting that "centers of excellence" have yet to play an important role in patient choice of hospital. The authors found that distance matters, and that patients prefer nearby hospitals, moreso for some medical conditions than others, in ways consistent with economic theories of consumer choice.

journal_name

Med Care

journal_title

Medical care

authors

Dranove D,White WD,Wu L

doi

10.1097/00005650-199301000-00004

subject

Has Abstract

pub_date

1993-01-01 00:00:00

pages

52-64

issue

1

eissn

0025-7079

issn

1537-1948

journal_volume

31

pub_type

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