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Mandatory insurance coverage and hospital productivity in Massachusetts: Bending the curve?

Thompson, Mark A.; Huerta, Timothy R.; Ford, Eric W.

doi: 10.1097/HCM.0b013e318242d0ba

Objective: The aim of this study was to examine whether universal insurance coverage mandates lead to a more productive use of hospital resources.

Data Sources: The American Hospital Association’s Annual Survey and the Centers for Medicare and Medicaid Services’ case mix index for fiscal years 2005 through 2008 were used.

Study Design: A Malmquist approach was used to assess hospitals’ productivity in the United States and Massachusetts over the sample period. Propensity score matching is used to “simulate” a randomized control group of hospitals from other markets to compare with Massachusetts. Comparisons are then made to examine if productivity differences are due to universal health insurance coverage mandate.

Principal Findings: In the early stages, Massachusetts’ coverage mandates lead to a significant drop in hospitals’ productivity relative to comparable facilities in other states. In 2008, Massachusetts functioned 3.53% below its 2005 level, whereas facilities across the United States have seen a 4.06% increase over the same period.

Conclusions: If the individual mandate is implemented nationwide, the Massachusetts’ experience indicates that a near-term decrease in overall hospital productivity will occur. As such, current cost estimates of the Patient Protection and Affordable Care Act’s impact on overall health spending are potentially understated.

Mark A. Thompson, PhD, is Associate Professor, Rawls College of Business, Texas Tech Unversity, Lubbock. E-mail:

Timothy R. Huerta, PhD, is Assistant Professor and Director, Center for Health Innovation, Education, & Research, Texas Tech University, Lubbock. E-mail:

Eric W. Ford, MPH, PhD, is Forsyth Medical Center Distinguished Professor of Healthcare, Department of Management, Bryan School of Business and Economics, The University of North Carolina Greensboro. E-mail:

The authors have disclosed that they have no significant relationship with, or financial interest in, any commercial companies pertaining to this article.

© 2012 Lippincott Williams & Wilkins, Inc.