Our objective was to determine the association between indicators of surgical quality – incidence of major complications and failure-to-rescue – and hospital market concentration in light of differences in costs of care.

Patients undergoing coronary artery bypass graft (CABG), colon resection, pancreatic resection, or liver resection in the 2008–2011 Nationwide Inpatient Sample were identified. The effect of hospital market concentration on major complications, failure-to-rescue, and inpatient costs was estimated at the lowest and highest mortality hospitals using multivariable regression techniques.

A weighted total of 527,459 patients were identified. Higher market concentration was associated with between 4% and 6% increased odds of failure-to-rescue across all four procedures. Across procedures, more concentrated markets had decreased inpatient costs (average marginal effect ranging from -$3064 (95% CI: -$5812 - -$316) for CABG to -$4876 (-$7773 - -$1980) for liver resection.

In less competitive (more concentrated) hospital markets, higher overall risk of failure-to-rescue after complications was accompanied by lower inpatient costs, on average. These data suggest that market controls may be leveraged to influence surgical quality and costs.