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Endogenous Hospital Regulation and Its Effects on Hospital and Non-hospital Expenditures

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  • Lanning, Joyce A
  • Morrisey, Michael A
  • Ohsfeldt, Robert L

Abstract

Past studies of hospital rate setting regulation conclude that mature programs have been effective in constraining hospital expenditures. However, if rate regulation is influenced by higher hospital expenditures the relationship between expenditures and rate setting is confounded. This study assesses the impact of rate setting on hospital and non-hospital expenditures using a simultaneous-equation model which separates the effects of hospital expenditures on the decision to regulate from the effects of regulation on expenditures. The simultaneous-equation results indicate that mature rate setting is associated with lower per capita health care expenditures, including hosital and non-hospital expenditures. Copyright 1991 by Kluwer Academic Publishers

Suggested Citation

  • Lanning, Joyce A & Morrisey, Michael A & Ohsfeldt, Robert L, 1991. "Endogenous Hospital Regulation and Its Effects on Hospital and Non-hospital Expenditures," Journal of Regulatory Economics, Springer, vol. 3(2), pages 137-154, June.
    • Handle: RePEc:kap:regeco:v:3:y:1991:i:2:p:137-54
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    Cited by:

    1. Stratmann, Thomas & Baker, Matthew, 2016. "Are Certificate-of-Need Laws Barriers to Entry? How They Affect Access to MRI, CT, and PET Scans," Working Papers 06892, George Mason University, Mercatus Center.
    2. Bailey, James, 2016. "Can Health Spending Be Reined In through Supply Constraints? An Evaluation of Certificate-of-Need Laws," Working Papers 05192, George Mason University, Mercatus Center.
    3. James Bailey, 2018. "Does “Excess Supply” Drive Excessive Health Spending? The Case of Certificate-of-Need Laws," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 33(Winter 20), pages 91-109.
    4. Edward Alan Miller, 2005. "State health policy making determinants, theory, and methods: A synthesis," Social Science & Medicine, Elsevier, vol. 61(12), pages 2639-2657, December.
    5. Baker, Matthew C. & Stratmann, Thomas, 2021. "Barriers to entry in the healthcare markets: Winners and Losers from certificate-of-need laws," Socio-Economic Planning Sciences, Elsevier, vol. 77(C).
    6. Ni, Huan & Paul, Jomon Aliyas & Bagchi, Aniruddha, 2017. "Effect of Certificate of Need Law on the intensity of competition: The market for emergency care," Socio-Economic Planning Sciences, Elsevier, vol. 60(C), pages 34-48.
    7. Vivian Ho, 2006. "Does certificate of need affect cardiac outcomes and costs?," International Journal of Health Economics and Management, Springer, vol. 6(4), pages 300-324, December.
    8. James Bailey & Tom Hamami, 2023. "Competition and health‐care spending: Theory and application to Certificate of Need laws," Contemporary Economic Policy, Western Economic Association International, vol. 41(1), pages 128-145, January.
    9. Polsky, Daniel & David, Guy & Yang, Jianing & Kinosian, Bruce & Werner, Rachel M., 2014. "The effect of entry regulation in the health care sector: The case of home health," Journal of Public Economics, Elsevier, vol. 110(C), pages 1-14.
    10. Jill R. Horwitz & Daniel Polsky, 2015. "Cross Border Effects of State Health Technology Regulation," American Journal of Health Economics, MIT Press, vol. 1(1), pages 101-123, Winter.
    11. Jill R. Horwitz & Daniel Polsky, 2014. "Cross Border Effects of State Health Technology Regulation," NBER Working Papers 19801, National Bureau of Economic Research, Inc.
    12. Molly S. Myers & Kathleen M. Sheehan, 2020. "The Impact of Certificate of Need Laws on Emergency Department Wait Times," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 35(Spring 20), pages 59-75.
    13. Guy David & Lorens A. Helmchen & Robert A. Henderson, 2009. "Does advanced medical technology encourage hospitalist use and their direct employment by hospitals?," Health Economics, John Wiley & Sons, Ltd., vol. 18(2), pages 237-247, February.
    14. Rexford E. Santerre & Debra Pepper, 2000. "Survivorship in the US hospital services industry," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 21(5), pages 181-189.

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