The Effects of Cardiac Specialty Hospitals on the Cost and Quality of Medical Care

36 Pages Posted: 1 Jun 2006 Last revised: 29 Jun 2010

See all articles by Jason R. Barro

Jason R. Barro

HBS Negotiations, Organizations and Markets Unit; National Bureau of Economic Research (NBER)

Robert S. Huckman

Harvard Business School; National Bureau of Economic Research (NBER)

Daniel P. Kessler

Stanford Graduate School of Business; National Bureau of Economic Research (NBER)

Date Written: October 2005

Abstract

The recent rise of specialty hospitals -- typically for-profit firms that are at least partially owned by physicians -- has led to substantial debate about their effects on the cost and quality of care. Advocates of specialty hospitals claim they improve quality and lower cost; critics contend they concentrate on providing profitable procedures and attracting relatively healthy patients, leaving (predominantly nonprofit) general hospitals with a less-remunerative, sicker patient population. We find support for both sides of this debate. Markets experiencing entry by a cardiac specialty hospital have lower spending for cardiac care without significantly worse clinical outcomes. In markets with a specialty hospital, however, specialty hospitals tend to attract healthier patients and provide higher levels of intensive procedures than general hospitals.

Suggested Citation

Barro, Jason R. and Huckman, Robert S. and Kessler, Daniel Philip, The Effects of Cardiac Specialty Hospitals on the Cost and Quality of Medical Care (October 2005). NBER Working Paper No. w11707. Available at SSRN: https://ssrn.com/abstract=845264

Jason R. Barro (Contact Author)

HBS Negotiations, Organizations and Markets Unit ( email )

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Robert S. Huckman

Harvard Business School ( email )

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National Bureau of Economic Research (NBER)

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Daniel Philip Kessler

Stanford Graduate School of Business ( email )

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650-725-6152 (Fax)

National Bureau of Economic Research (NBER)

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United States

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