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Can Ranking Hospitals on the Basis of Patients' Travel Distances Improve Quality of Care?

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  • 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.

Suggested Citation

  • Daniel P. Kessler, 2005. "Can Ranking Hospitals on the Basis of Patients' Travel Distances Improve Quality of Care?," NBER Working Papers 11419, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:11419
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    References listed on IDEAS

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    1. David Dranove & Daniel Kessler & Mark McClellan & Mark Satterthwaite, 2003. "Is More Information Better? The Effects of "Report Cards" on Health Care Providers," Journal of Political Economy, University of Chicago Press, vol. 111(3), pages 555-588, June.
    2. Cory S. Capps & David Dranove & Shane Greenstein & Mark Satterthwaite, 2001. "The Silent Majority Fallacy of the Elzinga-Hogarty Criteria: A Critique and New Approach to Analyzing Hospital Mergers," NBER Working Papers 8216, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Marla Nelson, 2009. "Are Hospitals an Export Industry?," Economic Development Quarterly, , vol. 23(3), pages 242-253, August.
    2. Ginger Zhe Jin & Alex Whalley, 2007. "The Power of Attention: Do Rankings Affect the Financial Resources of Public Colleges?," NBER Working Papers 12941, National Bureau of Economic Research, Inc.

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    JEL classification:

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

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