Working Paper: NBER ID: w11419
Authors: Daniel P. Kessler
Abstract: Conventional outcomes report cards-- public disclosure of information about the patient-background-adjusted health outcomes of individual hospitals and physicians -- may help improve quality, but they may also encourage providers to "game" the system by avoiding sick and/or seeking healthy patients. In this paper, I propose an alternative approach: ranking hospitals on the basis of the travel distances of their Medicare patients. At least in theory, a distance report card could dominate conventional outcomes report cards: a distance report card might measure quality of care at least as well but suffer less from selection problems. I use data on elderly Medicare beneficiaries with heart attack and stroke from 1994 and 1999 to show that a distance report card would be both valid -- that is, correlated with true quality -- and able to distinguish confidently among hospitals -- that is, able to reject at conventional significance levels the hypothesis that the true quality of a low-ranked hospital was the same as the quality of the average hospital. The hypothetical distance report card I propose compares favorably to (although does not necessarily dominate) the California AMI outcomes report card.
Keywords: hospital quality; Medicare; travel distance; health outcomes
JEL Codes: I1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Distance report card (Y10) | Hospital quality distinction (L15) |
| Higher average Medicare expenditures (H51) | Better outcomes (I14) |
| Patient travel distance (R41) | Health outcomes (I14) |
| High-distance hospitals (I11) | Health outcomes (I14) |
| Hospital distance (I19) | Mortality (I12) |