Hospital Choices, Hospital Prices, and Financial Incentives to Physicians
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CitationHo, Kate, and Ariel Pakes. 2014. “Hospital Choices, Hospital Prices, and Financial Incentives to Physicians.” American Economic Review 104 (12): 3841–84. https://doi.org/10.1257/aer.104.12.3841.
AbstractWe 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.
Citable link to this pagehttp://nrs.harvard.edu/urn-3:HUL.InstRepos:37907098
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