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Evaluating the Effect of Ownership Status on Hospital Quality: The Key Role of Innovative Procedures
Laurent Gobillon and Carine Milcent
Annals of Economics and Statistics
No. 121/122 (June 2016), pp. 161-186
Stable URL: http://www.jstor.org/stable/10.15609/annaeconstat2009.121-122.161
Page Count: 26
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Mortality differences between university, non-teaching public and for-profit hospitals are investigated using an exhaustive French administrative dataset of patients admitted for heart attacks. Our results show that innovative procedures play a key role in explaining the effect of ownership status on hospital quality. When age, sex, diagnoses and co-morbidities are held constant, the mortality rates in for-profit and university hospitals are similar, but they are lower than in nonteaching public hospitals. When additionally controlling for innovative procedures, the mortality rate is higher in for-profit hospitals than in the two groups of public hospitals. This suggests that the quality of care in for-profit hospitals relies on their capacity to perform innovative procedures. A counterfactual exercise shows that if patients in non-teaching public hospitals were treated with innovative procedures following the assignment rule of for-profit hospitals rather than that of non-teaching public hospitals, their probability of death after a duration of 7 days would be 1.8 points lower. JEL: I12, I18 / KEY WORDS: Hospital Performance, Innovative Procedures, Stratified Duration Model.
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