TY - JOUR AU - Doyle, Joseph J, Jr. AU - Graves, John A AU - Gruber, Jonathan AU - Kleiner, Samuel TI - Do High-Cost Hospitals Deliver Better Care? Evidence from Ambulance Referral Patterns JF - National Bureau of Economic Research Working Paper Series VL - No. 17936 PY - 2012 Y2 - March 2012 DO - 10.3386/w17936 UR - http://www.nber.org/papers/w17936 L1 - http://www.nber.org/papers/w17936.pdf N1 - Author contact info: Joseph J. Doyle Jr. MIT Sloan School of Management 100 Main Street, E62-516 Cambridge, MA 02142 Tel: 617/452-3761 Fax: 617/258-6855 E-Mail: jjdoyle@mit.edu John A. Graves Vanderbilt University 2525 West End Ave. Suite 1200 Nashville, TN 37203 Tel: 6179352824 E-Mail: john.graves@vanderbilt.edu Jonathan Gruber Department of Economics, E52-434 MIT 77 Massachusetts Avenue Cambridge, MA 02139 Tel: 617/253-8892 Fax: 617/253-1330 E-Mail: gruberj@mit.edu Samuel Kleiner Cornell University College of Human Ecology 108 Martha Van Rensselaer Hall Ithaca, NY 14853 Tel: 607/255-1027 Fax: 607/255-4071 E-Mail: skleiner@ftc.gov AB - Endogenous patient sorting across hospitals can confound performance comparisons. This paper provides a new lens to compare hospital performance for emergency patients: plausibly exogenous variation in ambulance-company assignment. Ambulances are effectively randomly assigned to patients in the same area based on rotational dispatch mechanisms. Using Medicare data from 2002-2008, we show that ambulance company assignment importantly affects hospital choice for patients in the same zip code. Using data for New York state from 2000-2006 that matches exact patient addresses to hospital discharge records, we show that patients who live very near each other but on either side of ambulance-dispatch boundaries go to different types of hospitals. Both strategies show that higher-cost hospitals have significantly lower one-year mortality rates compared to lower-cost hospitals. We find that common indicators of hospital quality, such as indicators for "appropriate care" for heart attacks, are generally not associated with better patient outcomes. On the other hand, we find that measures of "leading edge" hospitals, such as teaching hospitals and hospitals that quickly adopt the latest technologies, are associated with better outcomes, but have little impact on the estimated mortality-hospital cost relationship. We also find that hospital procedure intensity is a key determinant of the mortality-cost relationship, suggesting that treatment intensity, and not differences in quality reflected in prices, drives much of our findings. The evidence also suggests that there are diminishing returns to hospital spending and treatment intensity. ER -