Selective-Referral and Unobserved Patient Heterogeneity – Bias in the Volume-Outcome Relationship

27 Pages Posted: 18 Feb 2015

See all articles by Corinna Hentschker

Corinna Hentschker

Rhine-Westphalia Institute for Economic Research (RWI-Essen)

Roman Mennicken

Landschaftsverband Rheinland

Date Written: November 17, 2014

Abstract

This paper examines the causal effect of the experience of a hospital with treating hip fractures (volume) on treatment outcome for patients. A full sample of administrative data from Germany for the year 2007 is used. We apply an instrumental variable approach to eliminate endogeneity concerns due to reverse causality and unobserved patient heterogeneity. As instruments for case volume we use the number of potential patients and the number of further hospitals in the region around every hospital. Our results indicate that after application of an IV regression of volume on outcome, volume significantly increases quality.

Keywords: volume; hospital quality; mortality; instrumental variables

JEL Classification: I11, I12, I18

Suggested Citation

Hentschker, Corinna and Mennicken, Roman, Selective-Referral and Unobserved Patient Heterogeneity – Bias in the Volume-Outcome Relationship (November 17, 2014). Ruhr Economic Paper No. 527, Available at SSRN: https://ssrn.com/abstract=2566242 or http://dx.doi.org/10.2139/ssrn.2566242

Corinna Hentschker (Contact Author)

Rhine-Westphalia Institute for Economic Research (RWI-Essen) ( email )

Hohenzollernstr. 1-3
Essen, 45128
Germany

Roman Mennicken

Landschaftsverband Rheinland ( email )

Kennedy-Ufer 2
Cologne, 50679
Germany

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