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

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  • 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.

Suggested Citation

  • Dana Goldman & John A. Romley, 2008. "Hospitals As Hotels: The Role of Patient Amenities in Hospital Demand," NBER Working Papers 14619, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:14619
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    References listed on IDEAS

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    Cited by:

    1. repec:ucp:jlabec:doi:10.1086/694654 is not listed on IDEAS
    2. Schmitz, Hendrik & Stroka, Magdalena A., 2014. "Do Elderly Choose Nursing Homes by Quality, Price or Location?," Ruhr Economic Papers 495, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    3. Paolo Berta & Gianmaria Martini & Francesco Moscone & Giorgio Vittadini, 2016. "The association between asymmetric information, hospital competition and quality of healthcare: evidence from Italy," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 179(4), pages 907-926, October.
    4. Kate Ho & Ariel Pakes, 2014. "Hospital Choices, Hospital Prices, and Financial Incentives to Physicians," American Economic Review, American Economic Association, vol. 104(12), pages 3841-3884, December.
    5. Brian Jacob & Brian McCall & Kevin Stange, 2018. "College as Country Club: Do Colleges Cater to Students’ Preferences for Consumption?," Journal of Labor Economics, University of Chicago Press, vol. 36(2), pages 309-348.
    6. Carrie Colla & Julie Bynum & Andrea Austin & Jonathan Skinner, 2016. "Hospital Competition, Quality, and Expenditures in the U.S. Medicare Population," NBER Working Papers 22826, National Bureau of Economic Research, Inc.
    7. Varkevisser, Marco & van der Geest, Stéphanie A. & Schut, Frederik T., 2012. "Do patients choose hospitals with high quality ratings? Empirical evidence from the market for angioplasty in the Netherlands," Journal of Health Economics, Elsevier, vol. 31(2), pages 371-378.
    8. repec:taf:servic:v:38:y:2018:i:1-2:p:4-26 is not listed on IDEAS
    9. repec:kap:hcarem:v:21:y:2018:i:2:d:10.1007_s10729-017-9399-1 is not listed on IDEAS
    10. Soheil Davari & Kemal Kilic & Gurdal Ertek, 2015. "Fuzzy bi-objective preventive health care network design," Health Care Management Science, Springer, vol. 18(3), pages 303-317, September.
    11. Moscone, Francesco & Tosetti, Elisa & Vittadini, Giorgio, 2009. "Social Interaction in Patients'�Hospital Choice: Evidences from Italy," MPRA Paper 17783, University Library of Munich, Germany.

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    JEL classification:

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

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