The Beginnings of Economists' Interest in Health Care
In June 1977, the Bureau of Economics held a conference surveying the state of competition in the heath care sector and prospects for using competition as a major component of health care production and financing. The conference brought together young health care economists and attorneys who went on to become the leaders of the health economics field today. The list of participants included Stuart Altman, Alan Enthoven, Roger Feldman, Ted Frech, Paul Ginsberg, Clark Havighurst, Joe Newhouse, Mark Pauly, Uwe Reinhardt, David Salkever, Frank Sloan, and more. This conference marked the beginning of the FTC’s economic role in health care competition policy. A volume appeared as Competition in the Health Care Sector: Past, Present, and Future, Federal Trade Commission, March 1978.
Since that illustrious beginning, the Bureau has produced various reports and working papers and supported policy-related research in a number of health care areas. The listings below provide links to many of the recent research papers authored by the Bureau of Economics staff or academic consultants and provides references to the Bureau’s other healthcare activities. As with all staff research, the views expressed are those of the authors and do not necessarily represent the views of the Commission or any Commissioner. For a listing of the formal legal actions or official guidance provided by the FTC in connection with its health care competition law enforcement endeavors, see the Bureau of Competition’s web page at http://www.ftc.gov/bc/bchealthcare.htm
Health Care Policy Research (1996 to the present):
Hospital Industry Structure and Mergers
Several FTC staff hospital merger retrospective analyses are published in a special hospital merger retrospective issue of the International Journal of the Economics of Business, 18(1), April 2011. That issue was edited by Michael G. Vita and Deborah Haas-Wilson.
"A Retrospective Analysis of the Clinical Quality Effects of the Acquisition of Highland Park Hospital by Evanston Northwestern Healthcare," (November 2010), David J. Balan, Patrick S. Romano
- “The Effect of Hospital Mergers on Inpatient Prices: A Case Study of the New Hanover-Cape Fear Transaction,” (January 2009), Aileen Thompson
- “Two Hospital Mergers on Chicago’s North Shore: A Retrospective Study,” (January 2009), Deborah Haas-Wilson and Christopher Garmon.
- “The Price Effects of Hospital Mergers: A Case Study of the Sutter-Summit Transaction,” (November 2008), Steven Tenn
- “Competition Among Hospitals,” (November 2002), Martin Gaynor and William B. Vogt
- “The Competitive Effects of Not-for-Profit Hospital Mergers: A Case Study,” (March 2001), Michael G. Vita and Seth Sacher
- “Geographic Markets in Hospital Mergers: A Case Study,” (January 2001), John Simpson
- “Do Non-Profit Hospitals Exercise Market Power?” (November 1996), John Simpson and Richard Shin
Health Care Delivery System Issues (Competition, Incentives, Quality, Cost, etc.)
- "Hospital Competition and Charity Care," (October 2006), Christopher Garmon.
- “Competition and Quality in Health Care Markets: What Do We Know, What Don’t We Know?” (March 2006), Martin Gaynor
- “Causality, Learning and Forgetting in Surgery,” (January 2006), Gautam Gowrisankaran, Vivian Ho, and Robert J. Town
- “The Effects of Competition on Variation in the Quality and Cost of Medical Care,” (Fall 2005), Daniel P. Kessler and Jeffrey J. Geppert
- “Can Ranking Hospitals on the Basis of Patient’s Travel Distances Improve the Quality of Care?” (June 2003), Daniel P. Kessler
- “Regulatory Restrictions on Selective Contracting: An Empirical Analysis of ‘Any Willing Provider’ Regulations,” (June 2001), Michael G. Vita
- “Physician Networks, Integration and Efficiency,” (April 1998), Seth Sacher and Louis Silvia
The Pharmaceutical Industry
Authorized Generic Drugs: Short Term Effects and Long Term Impact: A Report of the Federal Trade Commission (August 2011)
Entry Threats and Pricing in the Generic Drug Industry (June 2010), Brett Wendling, Steven Tenn
- Pharmacy Benefit Managers: Ownership of Mail-Order Pharmacies: A Federal Trade Commission Report, (August 2005), Michael S. Wroblewski, David P. Schmidt, et al.
- “Strategic Cannibalization from ‘Branded Generics,’” (May 2005), David Reiffen and Michael R. Ward
- “Pharmaceutical Development Phases: A Duration Analysis,” (October 2004), Rosa M. Abrantes-Metz,
Christopher P. Adams, and Albert Metz
- “New Drug Development: Estimating Entry From Human Clinical Trials,” (July 2003), Christopher P. Adams and Van V. Brantner
- “Generic Drug Industry Dynamics,” (February 2002), David Reiffen and Michael R. Ward
- The Pharmaceutical Industry: Competitive and Antitrust Issues in an Environment of Change, (March 1999), Roy Levy
Health Claims for Foods and Drugs
- “Consumer Perceptions of Qualified Health Claims in Advertising,” (July 2005), R. Dennis Murphy
- FTC Staff Comments Before the Food and Drug Administration Concerning Consumer-Directed Promotion (for prescription drugs), (May 2004)
- Advertising Nutrition & Health, Evidence from Food Advertising 1977-1997 (September 2002), Pauline M. Ippolito and Janis K. Pappalardo
- A Generic Copy Test of Food Health Claims in Advertising, (November 1998), R. Dennis Murphy (principal author), Theodore H. Hoppock and Michelle K. Rusk (contributing authors)
- Information and Advertising Policy: A Study of Fat and Cholesterol Consumption in the United States, 1977-1990 (September, 1996), Pauline M. Ippolito and Alan D. Mathios
Older Reports on Health Care Competition and Consumer Issues:
- Health Claims in Advertising and Labeling: A Study of the Cereal Market, (August 1989), Pauline M. Ippolito and Alan D. Mathios.
An empirical examination of the effects of the health claims in fiber cereals which began in 1984. Evidence indicates that health claims in advertising significantly alter consumer behavior and reach groups not otherwise reached by government and general health information.
- The Effect of State Certificate-of-Need Laws on Hospital Costs: An Economic Policy Analysis, (January 1988), Daniel Sherman
Study evaluates the effects of CON regulation on hospital costs using 1983-1984 data for a national sample of 3708 hospitals. Study finds no evidence that CON programs have led to the resource savings they were designed to promote, but rather indicates that reliance on CON review may raise hospital patient treatment costs. Study also finds that among independently-operated hospitals, state and local government hospitals and for-profit hospitals have costs between 5.5 and 13 percent lower than those of voluntary hospitals. However, costs of for-profit and government hospitals appear to be higher than those of system voluntary hospitals when these hospitals are either owned, leased, or managed as part of a hospital system.
- Competition Among Hospitals, (May 1987), Monica Noether
Hospital price and expense data for 1978-79 are examined to identify the effects of competition. The results imply that a reduction in market concentration results in an increase in both price and quality competition. Other results concerning the effect of nonprofit organization, CON laws, hospital management, etc., are also obtained.
- Restrictions on Dental Auxiliaries, (May 1987), J. Nellie Liang and Jonathan Ogur
Examines empirically the effects of various state restrictions on the number and use of dental hygienists and assistants. Concludes that relaxation of restrictions on the number of hygienists that a dentist may employ would benefit consumers by providing the same quality of service at a lower price. Gains to consumers could reach $1 billion per year.
- Certificate of Need Regulation of Entry into Home Health Care, (January 1986), Keith B. Anderson and David I. Kass
Examines the justification for requiring Certificate of Need approval for home health care providers. No evidence is found that home health firms located in states with these regulations achieve available economies of scale to a greater degree than firms in unregulated states.
- Generic Substitution and Prescription Drug Prices: Economic Effects of State Drug Product Selection Laws, (September 1985), Alison Masson and Robert L. Steiner
An analysis of the effects of state drug product selection laws and the growth of generic drugs; looks at earlier recommendations in the FTC/FDA model statute.
- Effects of Restrictions on Advertising and Commercial Practice in the Professions: The Case of Optometry, (September 1980), Ronald S. Bond, John E. Kwoka, Jr., John J. Phelan, and Ira Taylor Whitten
An examination of the quality and price effects of various state-level restrictions on the commercial practice of optometry. Comparing the most restrictive and least restrictive cities, the study finds that prices are lower and quality is no lower in non-restrictive versus restrictive cities, although advertising optometrists and commercial chain optometrists in non-restrictive cities provide less thorough eye examinations.
- Competition in the Health Care Sector: Past, Present, and Future (March 1978)
Warren Greenberg, ed.
Health Care Conferences and Related Activity:
- Conference on Health Care Information and Competition (April 2004)
The Bureau of Economics organized an FTC Conference on Health Care Information and Competition The conference brought together over a dozen academics and heath policy experts to describe their research and discuss the role of competition and information in the evolution of the U.S. healthcare system.
Agency for Health Care Research and Quality (AHRQ) / FTC Interaction: