Center for Studying Health System Change

Providing Insights that Contribute to Better Health Policy

Advanced Search Instructions

You can refine your search with the following modifiers:

* Use an to perform a wildcard search.Example: prescript* would return "prescription", "prescriptions" etc.
"" Use quotes to match a phrase.Example: "prescription drug" only returns results where the words are next to each other.
+ Use a plus sign to perform a search where the additional term MUST be part of the page.Example: prescription +drug
- Use a minus sign to perform a search where the additional term SHOULD NOT be part of the page.Example: prescription -drug
< > Use a < > sign to perform a search where the additional term should be of greater or lesser importance in the search.Example: prescription >drug
Find pages with the word precription with additional importance for the word drug.
( ) Use parentheses to group different search terms together.Example: prescription (+medicare -drug)

Insurance Coverage & Costs Access to Care Quality & Care Delivery Health Care Markets Employers/Consumers Health Plans Hospitals Physicians Issue Briefs Data Bulletins Research Briefs Policy Analyses Community Reports Journal Articles Other Publications Surveys Site Visits Design and Methods Data Files

Changes in Hospital Competitive Strategy: A New Medical Arms Race?

Feb. 21, 2003
Health Services Research, 38:1, Part II (February 2003), pp. 447-469
Kelly Devers, Linda R. Brewster, Lawrence P. Casalino

Hospitals’ strategic emphasis changed significantly between 1996-1997 and 2000-2001. In the mid-1990s, hospitals primarily competed on price through "wholesale" strategies (i.e., providing services attractive to managed care plans). By 2000-2001, nonprice competition was becoming increasingly important and hospitals were reviving "retail" strategies (i.e., providing services attractive to individual physicians and the patients they serve). Three major factors explain this shift in hospital strategy: less than anticipated selective contracting and capitated payment; the freeing up of hospital resources previously devoted to horizontal and vertical integration strategies; and, the emergence and growth of new competitors.

Renewed emphasis on nonprice competition and retail strategies, and the service mimicking and one-upmanship that result, suggest that a new medical arms race is emerging. However, there are important differences between the medical arms race today and the one that occurred in the 1970s and early 1980s: the hospital market is more concentrated and price competition remains relatively important. The development of a new medical arms race has significant research and policy implications.

Click here for a PDF of the article.


Back to Top