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

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  • Jason R. Barro
  • Robert S. Huckman
  • Daniel P. Kessler

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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Bibliographic Info

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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Publication status: published as Barro, Jason R. & Huckman, Robert S. & Kessler, Daniel P., 2006. "The effects of cardiac specialty hospitals on the cost and quality of medical care," Journal of Health Economics, Elsevier, vol. 25(4), pages 702-721, July.
Handle: RePEc:nbr:nberwo:11707

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Cited by:
  1. Afschin Gandjour, 2012. "Presenting Germany’s drug pricing rule as a cost-per-QALY rule," Health Care Management Science, Springer, vol. 15(2), pages 103-107, June.
  2. Afschin Gandjour, 2011. "Germany’s decision rule for setting ceiling prices of drugs," Applied Health Economics and Health Policy, Springer, vol. 9(2), pages 65-71, March.
  3. Zack Cooper & Stephen Gibbons & Simon Jones & Alistair McGuire, 2012. "Does Competition Improve Public Hospitals' Efficiency? Evidence from a Quasi-Experiment in the English National Health Service," CEP Discussion Papers dp1125, Centre for Economic Performance, LSE.
  4. Gary Ferrier & Hervé Leleu & James Moises & Vivian Valdmanis, 2013. "The Focus Efficiency of U.S. Hospitals," Atlantic Economic Journal, International Atlantic Economic Society, vol. 41(3), pages 241-263, September.
  5. Daidone, Silvio & Street, Andrew, 2013. "How much should be paid for specialised treatment?," Social Science & Medicine, Elsevier, vol. 84(C), pages 110-118.
  6. Liu, Gordon G. & Li, Lin & Hou, Xiaohui & Xu, Judy & Hyslop, Daniel, 2009. "The role of for-profit hospitals in medical expenditures: Evidence from aggregate data in China," China Economic Review, Elsevier, vol. 20(4), pages 625-633, December.
  7. Suhui Li & Avi Dor, 2013. "How Do Hospitals Respond to Market Entry? Evidence from A Deregulated Market for Cardiac Revascularization," NBER Working Papers 18926, National Bureau of Economic Research, Inc.
  8. Martin Gaynor & Robert J. Town, 2011. "Competition in Health Care Markets," NBER Working Papers 17208, National Bureau of Economic Research, Inc.
  9. Courtemanche, Charles & Plotzke, Michael, 2010. "Does competition from ambulatory surgical centers affect hospital surgical output?," Journal of Health Economics, Elsevier, vol. 29(5), pages 765-773, September.
  10. David H. Howard & Yu-Chu Shen, 2011. "Comparative Effectiveness Research, COURAGE, and Technological Abandonment," NBER Working Papers 17371, National Bureau of Economic Research, Inc.
  11. Guy David & Richard Lindrooth & Lorens A. Helmchen & Lawton R. Burns, 2011. "Do Hospitals Cross Subsidize?," NBER Working Papers 17300, National Bureau of Economic Research, Inc.
  12. Kim, Sun Jung & Park, Eun-Cheol & Jang, Sung In & Lee, Minjee & Kim, Tae Hyun, 2013. "An analysis of the inpatient charge and length of stay for patients with joint diseases in Korea: Specialty versus small general hospitals," Health Policy, Elsevier, vol. 113(1), pages 93-99.

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