The researchers found that hospitals with higher survival rates net of the cost of treatment were rewarded with more patients. More specifically, if in a given year hospital A had 10 percent higher productivity than hospital B, hospital A tended to have 25 percent higher market share that year and to experience 4 percent more growth over the subsequent five years.
The team also found that the variation in survival rates was more important in driving market share than the variation in cost was. In other words, patients seem to seek out hospitals with better survival rates but not ones with lower costs.
More from Pete Orszag.
As long as people are able to make decisions, this will happen.
Decisions or good decisions?
up to the irrationals of the people
“patients seem to seek out hospitals with better survival rates but not ones with lower costs.”
This would seem accurate to me.
Agreed, this seems like commonsense.
People aren’t going to shop around for a hospital offering the lowest price. They are looking for high quality service to become healthy again.
At a certain point we will pay anything to be healthy.
Yet we kill ourselves with Hamburgers
“Both of these studies were carefully done, but there are still reasons to be cautious about concluding that hospitals are really wondrous examples of productivity. For example, the Chandra paper examined only one condition, yet hospitals treat a lot more than just heart attacks.”
A bit misleading
It gathers interest though, which is generally the point of media
Heart attacks are very common in the US.
For data collection reasons, I think the study is accurate enough.
“Yet the report also suggested the principal driver of such [pricing] variation is not hospitals but rather post-acute-care services — such as skilled nursing facilities, rehabilitation facilities, home health services and hospices.”
Interesting finding.
Another great post John! There truly is more quality competition than we realize!
yes, it is quite interesting the amount of competition that exists within the market
As health care continues to consolidate among a handful of providers, quality competition will diminish.
As most things do