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Spatial Disparities in Hospital Performance

  • Gobillon, Laurent


    (Paris School of Economics)

  • Milcent, Carine


    (Paris School of Economics)

Using a French exhaustive dataset, this paper studies the determinants of regional disparities in mortality for patients admitted to hospitals for a heart attack. These disparities are large, with an 80% difference in the propensity to die within 15 days between extreme regions. They may reflect spatial differences in patient characteristics, treatments, hospital characteristics, and local healthcare market structure. To distinguish between these factors, we estimate a flexible duration model. The estimated model is aggregated at the regional level and a spatial variance analysis is conducted. We find that spatial differences in the use of innovative treatments play a major role whereas the local composition of hospitals by ownership does not have any noticeable effect. Moreover, the higher the local concentration of patients in a few large hospitals rather than many small ones, the lower the mortality. Regional unobserved effects account for around 20% of spatial disparities.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6936.

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Length: 56 pages
Date of creation: Oct 2012
Date of revision:
Publication status: published in: Journal of Economic Geography, 2013, 13 (6), 1013-1040
Handle: RePEc:iza:izadps:dp6936
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  1. Carine Milcent & Brigitte Dormont, 2005. "Innovation diffusion under budget constraint. Microeconometric evidence on heart attack in France," Post-Print halshs-00754110, HAL.
  2. Ghatak, Maitreesh & Mueller, Hannes Felix, 2010. "Thanks for Nothing? Not-for-Profits and Motivated Agents," CEPR Discussion Papers 7663, C.E.P.R. Discussion Papers.
  3. Abowd, J.M. & Kramarz, F. & Margolis, D.N., 1995. "High-Wage Workers and High-Wage Firms," Cahiers de recherche 9503, Universite de Montreal, Departement de sciences economiques.
  4. David M. Cutler & Jill R. Horwitz, 1998. "Converting Hospitals from Not-for-profit to For-profit Status," NBER Working Papers 6672, National Bureau of Economic Research, Inc.
  5. Maarten Lindeboom & Eddy van Doorslaer, 2003. "Cut-point Shift and Index Shift in Self-reported Health," Tinbergen Institute Discussion Papers 03-042/3, Tinbergen Institute.
  6. John F. Geweke & Gautam Gowrisankaran & Robert J. Town, 2002. "Bayesian inference for hospital quality in a selection model," Working Paper Series 2002-18, Federal Reserve Bank of San Francisco.
  7. Lindeboom, Maarten & Kerkhofs, Marcel, 1998. "Multi-state models for clustered duration data: an application to workplace effects on individual sickness absenteeism," Serie Research Memoranda 0008, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  8. Blomqvist, Ake, 1991. "The doctor as double agent: Information asymmetry, health insurance, and medical care," Journal of Health Economics, Elsevier, vol. 10(4), pages 411-432.
  9. Combes, Pierre-Philippe & Duranton, Gilles & Gobillon, Laurent, 2004. "Spatial Wage Disparities: Sorting Matters!," CEPR Discussion Papers 4240, C.E.P.R. Discussion Papers.
  10. Zack Cooper & Stephen Gibbons & Simon Jones & Alistair McGuire, 2011. "Does Hospital Competition Save Lives? Evidence From The English NHS Patient Choice Reforms," Economic Journal, Royal Economic Society, vol. 121(554), pages F228-F260, 08.
  11. Wu, Stephen, 2001. "Adapting to heart conditions: a test of the hedonic treadmill," Journal of Health Economics, Elsevier, vol. 20(4), pages 495-507, July.
  12. Mion, Giordano & Naticchioni, Paolo, 2007. "The spatial sorting and matching of skills and firms," MPRA Paper 1721, University Library of Munich, Germany.
  13. Gilles Duranton & V Monastiriotis, 2000. "Mind the Gaps: the Evolution of Regional Inequalities in the UK, 1982-1997," CEP Discussion Papers dp0485, Centre for Economic Performance, LSE.
  14. Brigitte Dormont & Carine Milcent, 2002. "Quelle régulation pour les hôpitaux publics français ?," Revue Française d'Économie, Programme National Persée, vol. 17(2), pages 117-142.
  15. Pauly, Mark V, 1990. "The Rational Nonpurchase of Long-term-Care Insurance," Journal of Political Economy, University of Chicago Press, vol. 98(1), pages 153-68, February.
  16. Pauly, Mark V & Redisch, Michael, 1973. "The Not-For-Profit Hospital as a Physicians' Cooperative," American Economic Review, American Economic Association, vol. 63(1), pages 87-99, March.
  17. Frank A. Sloan & Gabriel A. Picone & Donald H. Taylor, Jr. & Shin-Yi Chou, 1998. "Hospital Ownership and Cost and Quality of Care: Is There a Dime's Worth of Difference?," NBER Working Papers 6706, National Bureau of Economic Research, Inc.
  18. Ho, Vivian & Hamilton, Barton H., 2000. "Hospital mergers and acquisitions: does market consolidation harm patients?," Journal of Health Economics, Elsevier, vol. 19(5), pages 767-791, September.
  19. Carine Milcent, 2005. "Hospital Ownership, Reimbursement Systems and Mortality Rates," Post-Print halshs-00754053, HAL.
  20. Elaine Silverman & Jonathan Skinner, 2001. "Are For-Profit Hospitals Really Different? Medicare Upcoding and Market Structure," NBER Working Papers 8133, National Bureau of Economic Research, Inc.
  21. Martin Gaynor, 2006. "What Do We Know About Competition and Quality in Health Care Markets?," NBER Working Papers 12301, National Bureau of Economic Research, Inc.
  22. Tay, Abigail, 2003. " Assessing Competition in Hospital Care Markets: The Importance of Accounting for Quality Differentiation," RAND Journal of Economics, The RAND Corporation, vol. 34(4), pages 786-814, Winter.
  23. Gowrisankaran, Gautam & Town, Robert J., 1999. "Estimating the quality of care in hospitals using instrumental variables," Journal of Health Economics, Elsevier, vol. 18(6), pages 747-767, December.
  24. repec:oup:qjecon:v:115:y:2000:i:2:p:577-615 is not listed on IDEAS
  25. Ridder, G. & Tunali, I., 1997. "Stratified Partial Likelihood Estimation," Papers 1997/17, Koc University.
  26. Propper, Carol & Burgess, Simon & Green, Katherine, 2004. "Does competition between hospitals improve the quality of care?: Hospital death rates and the NHS internal market," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1247-1272, July.
  27. Gabriel Picone & Shin-Yi Chou & Frank Sloan, 2002. "Are For-Profit Hospital Conversions Harmful to Patients and to Medicare?," RAND Journal of Economics, The RAND Corporation, vol. 33(3), pages 507-523, Autumn.
  28. Joseph P. Newhouse, 1996. "Reimbursing Health Plans and Health Providers: Efficiency in Production versus Selection," Journal of Economic Literature, American Economic Association, vol. 34(3), pages 1236-1263, September.
  29. Mark McClellan & Douglas Staiger, 1999. "The Quality of Health Care Providers," NBER Working Papers 7327, National Bureau of Economic Research, Inc.
  30. Lien, Hsien-Ming & Chou, Shin-Yi & Liu, Jin-Tan, 2008. "Hospital ownership and performance: Evidence from stroke and cardiac treatment in Taiwan," Journal of Health Economics, Elsevier, vol. 27(5), pages 1208-1223, September.
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