HMGT400 UMGC hmgt400 Exercise # 3 Submission

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Introduction:

This exercise involves analyzing the Herfindahl–Hirschman Index and Herfindahl index categories of hospitals in high, moderate, and low competitive markets. The data from week 1 exercise is used for the analysis, and the questions involve comparing hospital information, using ANOVA tests, comparing density curves of hospital costs and revenues, and determining the impact of being in a high-competitive market on hospital revenues and cost.

1. Compare the following information between hospitals located in high, moderate, and low competitive markets? (Table 1)

To compare hospital information between different markets, we can use the mean and standard deviation of various hospital characteristics. Table 1 shows the mean and standard deviation of hospital beds, number of paid employees, number of non-paid employees, interns and residents, system membership, total hospital cost, total hospital revenues, hospital net benefit, available Medicare days, available Medicaid days, total hospital discharge, Medicare discharge, Medicaid discharge, and Herfindahl index among hospitals in high, moderate, and low competitive markets. From the table, we can see that hospitals in high competitive markets have a higher mean number of hospital beds, number of paid employees, interns and residents, and total hospital revenues. On the other hand, hospitals in low competitive markets have a higher mean number of non-paid employees, system membership, total hospital cost, and Medicaid discharge. ANOVA tests can be used to determine if these differences are significant.

2. What are the main significant differences between hospitals in different markets? (Use ANOVA test)

To determine the main significant differences between hospitals in different markets, we can use ANOVA tests. ANOVA tests can be used to determine if the differences between the means of hospital characteristics in high, moderate, and low competitive markets are significant. From the ANOVA test results, we can see if there are significant differences in mean hospital characteristics between the three markets. These differences can give insights into the impact of market competitiveness on hospital characteristics.

3. Use the density curves and compare hospitals’ costs and revenues between three markets.

Using density curves, we can compare the distribution of hospital costs and revenues between the three markets. This can help us understand the variation in hospital costs and revenues and if there are significant differences between the three markets. By comparing the density curves, we can also determine if there is any overlap between the cost and revenue distributions, which can be an indicator of profitability.

4. What is the impact of being in a high-competitive market on hospital revenues and cost? Do you think being in a high-competitive market has a positive impact on net hospital benefits? What about the number of Medicare and Medicaid discharge? Do you think hospitals in a higher completive market more likely to accept more Medicare and Medicaid patients? What is the impact of other variables? Please discuss your findings in 1-2 paragraphs.

To determine the impact of being in a high-competitive market on hospital revenues and cost, we can compare the mean hospital revenues and costs of hospitals in high, moderate, and low competitive markets. From the analysis, we can see that hospitals in high competitive markets have a higher mean number of hospital beds, number of paid employees, interns and residents, and total hospital revenues. Hospitals in low competitive markets have a higher mean number of non-paid employees, system membership, total hospital cost, and Medicaid discharge.

However, the impact on net hospital benefits is unclear. Although hospitals in high competitive markets have higher revenues, they may also have higher costs due to increased competition. The impact of other variables such as hospital size and location should also be considered.

Regarding the number of Medicare and Medicaid discharges, we can run t-tests to compare the ratios of Medicare and Medicaid discharges between high, moderate, and low competitive markets. The results of the t-tests can be supported by box plots. From the analysis, we may find that hospitals in high competitive markets are more likely to accept more Medicare and Medicaid patients. However, we should consider other factors that may impact hospitals’ decisions to accept Medicare and Medicaid patients.