Do Higher-Priced Hospitals Deliver Higher-Quality Care?

36 Pages Posted: 28 Feb 2022 Last revised: 13 Jun 2022

See all articles by Zack Cooper

Zack Cooper

Yale University

Joseph J. Doyle

Massachusetts Institute of Technology (MIT) - Economics, Finance, Accounting (EFA); National Bureau of Economic Research (NBER)

John Graves

Vanderbilt University

Jonathan Gruber

Massachusetts Institute of Technology (MIT) - Department of Economics

Date Written: February 2022

Abstract

We analyze whether receiving care from higher-priced hospitals leads to lower mortality. We overcome selection issues by using an instrumental variable approach which exploits that ambulance companies are quasi-randomly assigned to transport patients and have strong preferences for certain hospitals. Being admitted to a hospital with two standard deviations higher prices raises spending by 52% and lowers mortality by 1 percentage point (35%). However, the relationship between higher prices and lower mortality is only present at hospitals in less concentrated markets. Receiving care from an expensive hospital in a concentrated market increases spending but has no detectable effect on mortality.

Suggested Citation

Cooper, Zack and Doyle, Joseph John and Graves, John and Gruber, Jonathan, Do Higher-Priced Hospitals Deliver Higher-Quality Care? (February 2022). NBER Working Paper No. w29809, Available at SSRN: https://ssrn.com/abstract=4045387

Zack Cooper (Contact Author)

Yale University ( email )

New Haven, CT 06520
United States

Joseph John Doyle

Massachusetts Institute of Technology (MIT) - Economics, Finance, Accounting (EFA) ( email )

50 Memorial Drive
E52-410
Cambridge, MA 02142
United States
617-452-3761 (Phone)
617-258-6855 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

John Graves

Vanderbilt University ( email )

2301 Vanderbilt Place
Nashville, TN 37240
United States

Jonathan Gruber

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

50 Memorial Drive
E52-391
Cambridge, MA 02142
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
34
Abstract Views
77
PlumX Metrics