Hospital Competition in Major U.S. Metropolitan Areas: Empirical Evidence

In response to dramatic rises in health care costs, policy-makers have been debating the relative merits of competitive strategies as a means of containing costs. This article represents a study of the 29 largest MSAs for 1991. Controlling for environmental conditions in each market, the impact of competition on hospital costs was examined. Competition was found to have had a significant positive impact on overall hospital costs.