Mary E. Deily

Enforcement of Pollution Regulations in a Declining Industry

An examination of the effect of EPA enforcement activity as it relates to company plant-closing decisions and company compliance decisions in the U.S. steel industry, finding fewer enforcement actions taken toward plants with an already high probability of closing.

Exit and Inefficiency: The Effects of Ownership Type

This study uses data on hospital closures to examine the relation between exit and inefficiency in an industry where for-profit, not-for-profit, and government firms coexist. The likelihood of hospital exit over the period 1986-91 is estimated as a function of hospital relative inefficiency, ownership type, and other factors, where hospital relative inefficiency is measured using residuals from estimation of a stochastic frontier cost function. We find that less efficient hospitals were more likely to exit when ownership was for-profit or not-for-profit, but that relative inefficiency did not have a significant effect on the probability of exit for government hospitals.

Investment Activity and the Exit Decision

Using level data from the U.S. steel industry, this paper tests and finds support for the hypothesis that firms in a contracting industr y first disinvest from, and then close, their high-cost plants. An investment decision model is estimated using a panel data set composed of the major replacement investments made in forty-three steel plants during the years 1960-81. The results indicate that the firms disinvested from those plants are least likely to remain profitable in an environment of strong competition from imports, minimills, and stagnating domestic demand. Copyright 1988 by MIT Press.

Comparing high- and low-performing hospitals using risk-adjusted excess mortality and cost inefficiency.

Abstract: This study examines characteristics associated with high- and low-performing hospitals, where performance is defined in terms of both mortality outcomes and efficiency. In particular, we use data for Florida hospitals in 1999-2001 to classify hospitals into performance groups based on both risk-adjusted excess mortality and cost efficiency. The results indicate that hospitals in the high-performing group were more likely to be for-profit, had higher occupancy rates, had proportionately more Medicare and proportionately fewer Medicaid and self-pay patients, used fewer patient-care personnel per admission, and had higher operating margins than all other hospitals. Hospitals in the low-performing group, on the other hand, were less likely to be for-profit, had more beds, used more patient-care personnel per admission, had lower pay per patient-care personnel, had higher average costs, and had lower operating margins than all other hospitals. Interestingly, managed care presence, measured by proportion of HMO-PPO admissions, was not a significant factor in differentiating hospital performance groups.

Travel distance and health outcomes for scheduled surgery.

Background:Changes in the location and availability of surgical services change the distances that patients must travel for surgery. Identifying health effects related to travel distance is therefore crucial to evaluating policies that affect the geographic distribution of these services. We examine the health outcomes of coronary artery bypass graft (CABG) patients in Pennsylvania for evidence that traveling further to a hospital for a one-time, scheduled surgical procedure causes harm. Methods:We perform instrumental-variable regressions to test for the effect of distance to the admitting hospital on the in-hospital mortality and readmission rates of 102,858 CABG patients in Pennsylvania during 1995–2005, where the instrumental variables are constructed based on the quality of and distance to nearby CABG hospitals. Results:We found that patients living near a CABG hospital with acceptable quality traveled significantly less and if they were high-risk, had lower in-hospital mortality rates. Readmission rates in general are not affected by patients’ travel distance. Discussion:The positive correlation between travel distance and health outcomes observed by previous studies may reflect the confounding effects of behavioral factors and patient health risks. We found instead that living further from the admitting hospital increases in-hospital mortality for high-risk CABG patients. More research on the possible causes of these effects is necessary to identify optimal policy responses.

Competition and the impact of online hospital report cards

Information on the quality of healthcare gives providers an incentive to improve care, and this incentive should be stronger in more competitive markets. We examine this hypothesis by studying Pennsylvanian hospitals during the years 1995-2004 to see whether those hospitals located in more competitive markets increased the quality of the care provided to Medicare patients after report cards rating the quality of their Coronary Artery Bypass Graft programs went online in 1998. We find that after the report cards went online, hospitals in more competitive markets used more resources per patient, and achieved lower mortality among more severely ill patients.

Global budgets and provider incentives: hospitals' drug expenditures in Taiwan.

PURPOSE This chapter examines how drug prescribing behavior in Taiwanese hospitals changed after the government changed reimbursement systems. In 2002, Taiwan instituted a system in which hospitals are reimbursed for drug expenditures at full price from a fixed global budget before the remaining budget is allocated to reimburse all other expenditures, often at discounted prices. Providers are thus given a financial incentive to increase prescriptions. METHODOLOGY We isolate the effect of this system from that of other confounding factors by estimating a difference-in-difference model to analyze monthly drug expenditures of hospital departments for outpatients during the years 1999-2006. FINDINGS Our results suggest that hospital departments which use drugs more heavily as part of their regular medical care increased their drug prescription expenditures after the implementation of the global budget system. In addition, we find that the response was stronger among for-profit than not-for-profit and public hospitals. IMPLICATIONS Hospital doctors responded to the financial incentive created by the particular global budgeting system adopted in Taiwan by increasing expenditures on drug treatments for outpatients.

Hospital ownership and drug utilization under a global budget: a quantile regression analysis

BACKGROUND A global budgeting system helps control the growth of healthcare spending by setting expenditure ceilings. However, the hospital global budget implemented in Taiwan in 2002 included a special provision: drug expenditures are reimbursed at face value, while other expenditures are subject to discounting. That gives hospitals, particularly those that are for-profit, an incentive to increase drug expenditures in treating patients. METHODS We calculated monthly drug expenditures by hospital departments from January 1997 to June 2006, using a sample of 348 193 patient claims to Taiwan National Health Insurance. To allow for variation among responses by departments with differing reliance on drugs and among hospitals of different ownerships, we used quantile regression to identify the effect of the hospital global budget on drug expenditures. RESULTS Although drug expenditure increased in all hospital departments after the enactment of the hospital global budget, departments in for-profit hospitals that rely more heavily on drug treatments increased drug spending more, relative to public hospitals. CONCLUSIONS Our findings suggest that a global budgeting system with special reimbursement provisions for certain treatment categories may alter treatment decisions and may undermine cost-containment goals, particularly among for-profit hospitals.

A Cartel's Response to Cheating: An Empirical Investigation of the De Beers Diamond Empire

De Beers is one of the longest lived international cartels in history. But have recent events threatened the diamond pricing structure so carefully developed over the past 100 years? In this paper, we use time series econometric techniques to evaluate the cartels response to Russian cheating in the 1990s. We find that, despite massive Russian leaks, the cartel held to its long-term supply management policy of using its inventory to control the flow of rough diamonds into downstream markets. Although the cartel was able to survive the cheating, it remains unclear whether De Beers will continue to rely on its traditional strategy.

A mixed methods study of clinical information availability in obstetric triage and prenatal offices

Objective: To determine the effect of availability of clinical information from an integrated electronic health record system on pregnancy outcomes at the point of care. Materials and methods: We used provider interviews and surveys to evaluate the availability of pregnancy-related clinical information in ambulatory practices and the hospital, and applied multiple regression to determine whether greater clinical information availability is associated with improvements in pregnancy outcomes and changes in care processes. Our regression models are risk adjusted and include physician fixed effects to control for unobservable characteristics of physicians that are constant across patients and time. Results: Making nonstress test results, blood pressure data, antenatal problem lists, and tubal sterilization requests from office records available to hospital-based providers is significantly associated with reductions in the likelihood of obstetric trauma and other adverse pregnancy outcomes. Better access to prenatal records also increases the probability of labor induction and decreases the probability of Cesarean section (C-section). Availability of lab test results and new diagnoses generated in the hospital at ambulatory offices is associated with fewer preterm births and low-birth-weight babies. Discussion and conclusions: Increased availability of specific clinical information enables providers to deliver better care and improve outcomes, but some types of clinical data are more important than others. More available information does not always result from automated integration of electronic records, but rather from the availability of the source records. Providers depend upon information that they trust to be reliable, complete, consistent, and easily retrievable, even if this requires multiple interfaces.