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Evaluating the Effect of Ownership Status on Hospital Quality: The Key Role of Innovative Procedures

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  • Laurent Gobillon
  • Carine Milcent

Abstract

Mortality differences between university, non-teaching public and for-profit hospitals are investigated using an exhaustive French administrative dataset of patients admitted for heart attacks. Our results show that innovative procedures play a key role in explaining the effect of ownership status on hospital quality. When age, sex, diagnoses and co-morbidities are held constant, the mortality rates in for-profit and university hospitals are similar, but they are lower than in nonteaching public hospitals. When additionally controlling for innovative procedures, the mortality rate is higher in for-profit hospitals than in the two groups of public hospitals. This suggests that the quality of care in for-profit hospitals relies on their capacity to perform innovative procedures. A counterfactual exercise shows that if patients in non-teaching public hospitals were treated with innovative procedures following the assignment rule of for-profit hospitals rather than that of non-teaching public hospitals, their probability of death after a duration of 7 days would be 1.8 points lower,

Suggested Citation

  • Laurent Gobillon & Carine Milcent, 2016. "Evaluating the Effect of Ownership Status on Hospital Quality: The Key Role of Innovative Procedures," Annals of Economics and Statistics, GENES, issue 121-122, pages 161-186.
    • Handle: RePEc:adr:anecst:y:2016:i:121-122:p:161-186
    DOI: 10.15609/annaeconstat2009.121-122.161
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    File URL: http://www.jstor.org/stable/10.15609/annaeconstat2009.121-122.161
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    References listed on IDEAS

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    Cited by:

    1. Gobillon, Laurent & Milcent, Carine, 2017. "Competition and hospital quality: Evidence from a French natural experiment," CEPR Discussion Papers 11773, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

    Hospital Performance; Innovative Procedures; Stratified Duration Model.;

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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