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Healthcare Exceptionalism? Performance and Allocation in the U.S. Healthcare Sector

Amitabh Chandra, Amy Finkelstein, Adam Sacarny () and Chad Syverson

No 21603, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The conventional wisdom in health economics is that idiosyncratic features of the healthcare sector leave little scope for market forces to allocate consumers to higher performance producers. However, we find robust evidence across a variety of conditions and performance measures that higher quality hospitals tend to have higher market shares at a point in time and expand more over time. Moreover, we find that the relationship between performance and allocation is stronger among patients who have greater scope for hospital choice, suggesting a role for patient demand in allocation in the hospital sector. Our findings suggest that the healthcare sector may have more in common with “traditional” sectors subject to standard market forces than is often assumed.

JEL-codes: D22 D24 I11 (search for similar items in EconPapers)
Date: 2015-10
New Economics Papers: this item is included in nep-hea
Note: AG HC IO PE PR
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Published as Chandra, Amitabh, Amy Finkelstein, Adam Sacarny, and Chad Syverson. 2016. "Health Care Exceptionalism? Performance and Allocation in the US Health Care Sector." American Economic Review, 106 (8): 2110-44. DOI: 10.1257/aer.20151080

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Journal Article: Health Care Exceptionalism? Performance and Allocation in the US Health Care Sector (2016) Downloads
Working Paper: Healthcare Exceptionalism? Performance and Allocation in the U.S. Healthcare Sector (2015) Downloads
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