Hospital Choices, Hospital Prices and Financial Incentives to Physicians
We estimate an insurer-specific preference function which rationalizes hospital referrals for privately-insured births in California. The function is additively separable in: a hospital price paid by the insurer, the distance traveled, and plan and severity-specific hospital fixed effects (capturing hospital quality). We use an inequality estimator that allows for errors in price and detailed hospital-severity interactions and obtain markedly different results than those from a logit. The estimates indicate that insurers with more capitated physicians are more responsive to price. Capitated plans send patients further to utilize similar-quality lower-priced hospitals; but the cost-quality trade-off does not vary with capitation rates.
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| Length: | |
| Date of creation: | Aug 2013 |
| Date of revision: | |
| Publication status: | forthcoming in the American Economic Review. |
| Handle: | RePEc:nbr:nberwo:19333 |
| Note: | HC IO |
| Contact details of provider: | Postal: Phone: 617-868-3900 Web page: http://www.nber.orgEmail: More information through EDIRC
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