The proposed study will evaluate the flows of patients from their residence to the hospital, assess hospital performance in terms of costs, charges, and patient outcomes and analyze the relationships between hospital performance and patient flows. In addition, a model will be developed, tested, and used to simulate the effects of limiting patients' choice of hospitals. Analysis will be based on data from all three million patients discharged from California hospitals in 1983 as well as for patients with 14 specific diagnoses and procedures. Using this data, seven research questions will be addressed; (1) what distances do patients travel for hospital care; (2) what are the effects of distance, patient sociodemographic patterns, hospital quality, and alternate sources of care on patient travel; (3) how well can patient flows be simulated using an expanded gravity model; (4) are referrals concentrated in specific hospitals; (5) what are the characteristics of high- and low-patient volume hospitals; (6) are there diagnosis- or procedure-specific economies of scale as measured by charges; and (7) what is the effect of a competitive hospital market on diagnosis- or procedure-specific hospital costs. The results of this study are expected to enhance our understanding of interhospital referral patterns and hospital performance. The techniques developed will be useful for evaluating the effects on quality of care, patient travel, and hospital costs of constraining patients' choice of hospital either through regulating efforts or by selective contracting by third-party payors.
