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

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Author Info
Jason R. Barro
Robert S. Huckman
Daniel P. Kessler

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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.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 11707.

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Date of creation: Oct 2005
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Handle: RePEc:nbr:nberwo:11707

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I1 - Health, Education, and Welfare - - Health

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References listed on IDEAS
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  1. Jerry Cromwell & Brooke Harrow & Thomas G. McGuire & Randall P. Ellis, 1991. "Medicare Payment to Psychiatric Facilities: Unfair and Inefficient?," Papers 0008, Boston University - Industry Studies Programme.
  2. Held, Philip J. & Pauly, Mark V., 1983. "Competition and efficiency in the end stage renal disease program," Journal of Health Economics, Elsevier, vol. 2(2), pages 95-118, August. [Downloadable!] (restricted)
  3. Paul L. Joskow, 1980. "The Effects of Competition and Regulation on Hospital Bed Supply and the Reservation Quality of the Hospital," Bell Journal of Economics, The RAND Corporation, vol. 11(2), pages 421-447, Autumn. [Downloadable!] (restricted)
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  4. Becker, David & Kessler, Daniel & McClellan, Mark, 2005. "Detecting Medicare abuse," Journal of Health Economics, Elsevier, vol. 24(1), pages 189-210, January. [Downloadable!] (restricted)
  5. Daniel P. Kessler & Mark B. McClellan, 2002. "The Effects of Hospital Ownership on Medical Productivity," RAND Journal of Economics, The RAND Corporation, vol. 33(3), pages 488-506, Autumn.
  6. Chalkley, Martin & Malcomson, James M., 2000. "Government purchasing of health services," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 15, pages 847-890 Elsevier. [Downloadable!] (restricted)
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  7. Henry Hansmann & Daniel Kessler & Mark B. McClellan, 2003. "Ownership Form and Trapped Capital in the Hospital Industry," NBER Chapters, in: The Governance of Not-for-Profit Organizations, pages 45-70 National Bureau of Economic Research, Inc. [Downloadable!]
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