Hospital concentration and low-income populations: Evidence from New York State Medicaid*

While a large body of evidence has examined hospital concentration, its effects on health care for low-income populations are less explored. We use comprehensive discharge data from New York State to measure the effects of changes in market concentration on hospital-level inpatient Medicaid volumes. Holding fixed hospital factors constant, a one percent increase in HHI leads to a 0.6% (s.e. = 0.28%) decrease in the number of Medicaid admissions for the average hospital. The strongest effects are on admissions for birth (-1.3%, s.e. = 0.58%). These average hospital-level decreases largely reflect redistribution of Medicaid patients across hospitals, rather than overall reductions in hospitalizations for Medicaid patients. In particular, hospital concentration leads to a redistribution of admissions from non-profit hospitals to public hospitals. We find evidence that for births, physicians serving high shares of Medicaid beneficiaries in particular experience reduced admissions as concentration increased. These reductions may reflect preferences among these physicians or reduced admitting privileges by hospitals as a means to screen out Medicaid patients.

Automated summary

This study examines the effects of changes in market concentration on hospital-level inpatient Medicaid volumes using comprehensive discharge data from New York State. The findings show that an increase in market concentration leads to a decrease in the number of Medicaid admissions for hospitals, particularly for birth admissions. The decrease is mainly due to the redistribution of Medicaid patients across hospitals, rather than an overall reduction in hospitalizations for Medicaid patients. Additionally, the study finds that physicians serving a high proportion of Medicaid beneficiaries experience reduced admissions as concentration increases, which may be related to their preferences or hospitals' admitting privileges.