IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/11707.html
   My bibliography  Save this paper

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

Author

Listed:
  • 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.

Suggested Citation

  • Jason R. Barro & Robert S. Huckman & Daniel P. Kessler, 2005. "The Effects of Cardiac Specialty Hospitals on the Cost and Quality of Medical Care," NBER Working Papers 11707, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:11707
    Note: HE
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w11707.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Dranove, David, 1998. "Economies of scale in non-revenue producing cost centers: Implications for hospital mergers," Journal of Health Economics, Elsevier, vol. 17(1), pages 69-83, January.
    2. 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.
    3. Robinson, James C. & Luft, Harold S., 1985. "The impact of hospital market structure on patient volume, average length of stay, and the cost of care," Journal of Health Economics, Elsevier, vol. 4(4), pages 333-356, December.
    4. 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.
    5. 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.
    6. Becker, David & Kessler, Daniel & McClellan, Mark, 2005. "Detecting Medicare abuse," Journal of Health Economics, Elsevier, vol. 24(1), pages 189-210, January.
    7. 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.
    8. Robert S. Huckman & Gary P. Pisano, 2006. "The Firm Specificity of Individual Performance: Evidence from Cardiac Surgery," Management Science, INFORMS, vol. 52(4), pages 473-488, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:kap:hcarem:v:21:y:2018:i:1:d:10.1007_s10729-016-9376-0 is not listed on IDEAS
    2. repec:eee:socmed:v:196:y:2018:i:c:p:166-174 is not listed on IDEAS
    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. Daidone, Silvio & Street, Andrew, 2013. "How much should be paid for specialised treatment?," Social Science & Medicine, Elsevier, vol. 84(C), pages 110-118.
    5. 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.
    6. Cooper, Zack & Gibbons, Stephen & Skellern, Matthew, 2016. "Does competition from private surgical centres improve public hospitals’ performance? Evidence from the English National Health Service," LSE Research Online Documents on Economics 67662, London School of Economics and Political Science, LSE Library.
    7. Gaynor, Martin & Town, Robert J., 2011. "Competition in Health Care Markets," Handbook of Health Economics, Elsevier.
    8. Susan Lu & Huaxia Rui, 2014. "Can We Trust Online Physician Ratings? Evidence from Cardiac Surgeons in Florida," Working Papers 14-01, NET Institute.
    9. Sujoy Chakravarty, 2016. "Much ado about nothing? The financial impact of physician-owned specialty hospitals," International Journal of Health Economics and Management, Springer, vol. 16(2), pages 103-131, June.
    10. Gary Ferrier & Hervé Leleu & James Moises & Vivian Valdmanis, 2013. "The Focus Efficiency of U.S. Hospitals," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 41(3), pages 241-263, September.
    11. 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.
    12. Jonathan R. Clark & Robert S. Huckman, 2012. "Broadening Focus: Spillovers, Complementarities, and Specialization in the Hospital Industry," Management Science, INFORMS, vol. 58(4), pages 708-722, April.
    13. 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.
    14. repec:bla:jemstr:v:26:y:2017:i:1:p:152-168 is not listed on IDEAS
    15. Francesco Longo & Luigi Siciliani & Andrew Street, 2015. "Are costs differences between specialist and general hospitals compensated by the prospective payment system?," Discussion Papers 15/30, Department of Economics, University of York.
    16. 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.
    17. Vomhof, Markus, 2016. "Hospital competition with heterogeneous patient groups: Incentives and regulation," Ruhr Economic Papers 624, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    18. David, Guy & Lindrooth, Richard C. & Helmchen, Lorens A. & Burns, Lawton R., 2014. "Do hospitals cross-subsidize?," Journal of Health Economics, Elsevier, vol. 37(C), pages 198-218.
    19. 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.
    20. David H. Howard & Yu-Chu Shen, 2011. "Comparative Effectiveness Research, COURAGE, and Technological Abandonment," NBER Working Papers 17371, National Bureau of Economic Research, Inc.
    21. Trybou, Jeroen & De Regge, Melissa & Gemmel, Paul & Duyck, Philippe & Annemans, Lieven, 2014. "Effects of physician-owned specialized facilities in health care: A systematic review," Health Policy, Elsevier, vol. 118(3), pages 316-340.
    22. repec:eee:hepoli:v:122:y:2018:i:2:p:75-80 is not listed on IDEAS
    23. Diwas Singh KC & Christian Terwiesch, 2011. "The Effects of Focus on Performance: Evidence from California Hospitals," Management Science, INFORMS, vol. 57(11), pages 1897-1912, November.
    24. 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.
    25. David H. Howard & Guy David & Jason Hockenberry, 2017. "Selective Hearing: Physician-Ownership and Physicians’ Response to New Evidence," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 26(1), pages 152-168, February.

    More about this item

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:11707. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: http://edirc.repec.org/data/nberrus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.