Does hospital cooperation increase the quality of healthcare?

Abstract

Motivated by reasons such as altruism, managers from different hospitals may engage in cooperative behaviours, which shape the networked healthcare economy. In this paper we study the determinants of hospital cooperation and its association with the quality delivered by hospitals, using Italian administrative data. We explore the impact on patient transfers between hospitals (cooperation/network) of a set of demand-supply factors, as well as distance-based centrality measures. We then use this framework to assess how such cooperation is related to the overall quality for the hospital of origin and of destination of the patient transfer. The over-dispersed Poisson mixed model that we propose, inspired by the literature on social relations models, is suitably defined to handle network data, which are rarely used in health economics. The results show that distance plays an important role in hospital cooperation, though there are other factors that matter such as geographical centrality. Another empirical finding is the existence of a positive relationship between hospital cooperation and the overall quality of the connected hospitals. The absence of a source of information on the quality of hospitals accessible to all providers, such as in the form of star ratings, may prevent some hospitals to engage and cooperate with other hospitals of potentially higher quality. This may result in a lower degree of cooperation among hospitals and a reduction in quality overall.