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Hospitals As Hotels: The Role of Patient Amenities in Hospital Demand

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Author Info
Dana Goldman
John A. Romley
Abstract

Amenities such as good food, attentive staff, and pleasant surroundings may play an important role in hospital demand. We use a marketing survey to measure amenities at hospitals in greater Los Angeles and analyze the choice behavior of Medicare pneumonia patients in this market. We find that the mean valuation of amenities is positive and substantial. From the patient perspective, hospital quality therefore embodies amenities as well as clinical quality. We also find that a one-standard-deviation increase in amenities raises a hospital's demand by 38.4% on average, whereas demand is substantially less responsive to clinical quality as measured by pneumonia mortality. These findings imply that hospitals may have an incentive to compete in amenities, with potentially important implications for welfare.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14619.

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Date of creation: Dec 2008
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Handle: RePEc:nbr:nberwo:14619

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I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  6. Daniel P. Kessler & Mark B. McClellan, 2000. "Is Hospital Competition Socially Wasteful?," The Quarterly Journal of Economics, MIT Press, vol. 115(2), pages 577-615, May. [Downloadable!] (restricted)
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  13. David Dranove & Mark Shanley & Carol Simon, 1992. "Is Hospital Competition Wasteful?," RAND Journal of Economics, The RAND Corporation, vol. 23(2), pages 247-262, Summer. [Downloadable!] (restricted)
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  1. Moscone, Francesco & Tosetti, Elisa & Vittadini, Giorgio, 2009. "Social Interaction in Patients'’Hospital Choice: Evidences from Italy," MPRA Paper 17783, University Library of Munich, Germany. [Downloadable!]
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