Do High-Cost Hospitals Deliver Better Care? Evidence from Ambulance Referral Patterns

Joseph J. Doyle, Jr., John A. Graves, Jonathan Gruber and Samuel Kleiner

No 17936, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Endogenous patient sorting across hospitals can confound performance comparisons. This paper provides a new lens to compare hospital performance for emergency patients: plausibly exogenous variation in ambulance-company assignment. Ambulances are effectively randomly assigned to patients in the same area based on rotational dispatch mechanisms. Using Medicare data from 2002-2008, we show that ambulance company assignment importantly affects hospital choice for patients in the same zip code. Using data for New York state from 2000-2006 that matches exact patient addresses to hospital discharge records, we show that patients who live very near each other but on either side of ambulance-dispatch boundaries go to different types of hospitals. Both strategies show that higher-cost hospitals have significantly lower one-year mortality rates compared to lower-cost hospitals. We find that common indicators of hospital quality, such as indicators for "appropriate care" for heart attacks, are generally not associated with better patient outcomes. On the other hand, we find that measures of "leading edge" hospitals, such as teaching hospitals and hospitals that quickly adopt the latest technologies, are associated with better outcomes, but have little impact on the estimated mortality-hospital cost relationship. We also find that hospital procedure intensity is a key determinant of the mortality-cost relationship, suggesting that treatment intensity, and not differences in quality reflected in prices, drives much of our findings. The evidence also suggests that there are diminishing returns to hospital spending and treatment intensity.

JEL-codes: I12 (search for similar items in EconPapers)
Date: 2012-03
New Economics Papers: this item is included in nep-hea
Note: AG EH
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Published as "Measuring Returns to Hospital Care: Evidence from Ambulance Referral Patterns." (with John Graves, Jonathan Gruber, and Samuel Kleiner) Journal of Political Economy, Volume 123, Number 1, February 2015

Downloads: (external link)
http://www.nber.org/papers/w17936.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:17936

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w17936

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().