Adoption and Learning Across Hospitals: The Case of a Revenue-Generating Practice

Adam Sacarny

No 24497, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Performance-raising practices tend to diffuse slowly in the health care sector. To understand how incentives drive adoption, I study a practice that generates revenue for hospitals: submitting detailed documentation about patients. After a 2008 reform, hospitals could raise their Medicare revenue over 2% by always specifying a patient’s type of heart failure. Hospitals only captured around half of this revenue, indicating that large frictions impeded takeup. Exploiting the fact that many doctors practice at multiple hospitals, I find that four-fifths of the dispersion in adoption reflects differences in the ability of hospitals to extract documentation from physicians. Hospital adoption is robustly correlated with generating survival for heart attack patients and using inexpensive survival-raising standards of care. Hospital-physician integration and electronic medical records also influence adoption. These findings highlight the potential for institution-level frictions, including agency conflicts, to explain variations in health care performance across providers.

JEL-codes: D22 I1 L2 O31 O33 (search for similar items in EconPapers)
Date: 2018-04
New Economics Papers: this item is included in nep-hea and nep-ias
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Citations: View citations in EconPapers (15)

Published as Adam Sacarny, 2018. "Adoption and Learning Across Hospitals: The Case of a Revenue-Generating Practice," Journal of Health Economics, .

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Journal Article: Adoption and learning across hospitals: The case of a revenue-generating practice (2018)
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