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Selective-referral and Unobserved Patient Heterogeneity – Bias in the Volume-outcome Relationship

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  • Hentschker, Corinna
  • Mennicken, Roman

Abstract

This paper examines the causal effect of the experience of a hospital with treating hip fractures (volume) on treatment outcome for patients. A full sample of administrative data from Germany for the year 2007 is used. We apply an instrumental variable approach to eliminate endogeneity concerns due to reverse causality and unobserved patient heterogeneity. As instruments for case volume we use the number of potential patients and the number of further hospitals in the region around every hospital. Our results indicate that after application of an IV regression of volume on outcome, volume significantly increases quality.

Suggested Citation

  • Hentschker, Corinna & Mennicken, Roman, 2014. "Selective-referral and Unobserved Patient Heterogeneity – Bias in the Volume-outcome Relationship," Ruhr Economic Papers 527, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
  • Handle: RePEc:zbw:rwirep:527
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    References listed on IDEAS

    as
    1. Gaynor, Martin & Town, Robert J., 2011. "Competition in Health Care Markets," Handbook of Health Economics, Elsevier.
    2. Carine Milcent, 2005. "Hospital ownership, reimbursement systems and mortality rates," Health Economics, John Wiley & Sons, Ltd., vol. 14(11), pages 1151-1168.
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    5. Stock, James H & Wright, Jonathan H & Yogo, Motohiro, 2002. "A Survey of Weak Instruments and Weak Identification in Generalized Method of Moments," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(4), pages 518-529, October.
    6. Martin Gaynor & Rodrigo Moreno-Serra & Carol Propper, 2013. "Death by Market Power: Reform, Competition, and Patient Outcomes in the National Health Service," American Economic Journal: Economic Policy, American Economic Association, vol. 5(4), pages 134-166, November.
    7. Adam Ozimek & Daniel Miles, 2011. "Stata utilities for geocoding and generating travel time and travel distance information," Stata Journal, StataCorp LP, vol. 11(1), pages 106-119, March.
    8. Hentschker, Corinna & Mennicken, Roman, 2012. "The Relationship between Quality and Hospital Case Volume – An Empirical Examination with German Data," Ruhr Economic Papers 341, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    9. 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.
    10. Corinna Hentschker & Roman Mennicken, 2015. "The Volume‐Outcome Relationship and Minimum Volume Standards – Empirical Evidence for Germany," Health Economics, John Wiley & Sons, Ltd., vol. 24(6), pages 644-658, June.
    11. Mennicken, Roman & Kolodziej, Ingo W.K. & Augurzky, Boris & Kreienberg, Rolf, 2014. "Concentration of gynaecology and obstetrics in Germany: Is comprehensive access at stake?," Health Policy, Elsevier, vol. 118(3), pages 396-406.
    12. Hentschker, Corinna & Mennicken, Roman & Schmid, Andreas, 2014. "Defining Hospital Markets - An Application to the German Hospital Sector," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 1-17.
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    14. repec:zbw:rwirep:0469 is not listed on IDEAS
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    More about this item

    Keywords

    volume; hospital quality; mortality; instrumental variables;

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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