Assessing the Quality of Public Services: Does Hospital Competition Crowd Out the For-Profit Quality Gap?

Carol Propper, Johannes Kunz, Kevin Staub and Rainer Winkelmann

No 15045, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We examine variation in hospital quality across ownership, market concentration and membership of a hospital system. We use a measure of quality derived from the penalties imposed on hospitals under the flagship Hospital Readmissions Reduction Program. We employ a novel estimation approach that extracts latent hospital quality from panel data on penalties and addresses the problem of never- or always-penalized hospitals in short panels. Our quality measure correlates strongly across penalized conditions and with other non-incentivized quality metrics. We document a robust and sizable for-profit quality gap, which is largely crowded out by competition, particularly amongst high-quality and system-organized hospitals.

Keywords: A ordable care act; Hospital quality; Competition (search for similar items in EconPapers)
JEL-codes: H51 I1 I11 I18 (search for similar items in EconPapers)
Date: 2020-07
New Economics Papers: this item is included in nep-com, nep-hea, nep-ias and nep-ure
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Citations: View citations in EconPapers (3)

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