NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Effects of Cardiac Specialty Hospitals on the Cost and Quality of Medical Care

Jason R. Barro, Robert S. Huckman, Daniel P. Kessler

NBER Working Paper No. 11707
Issued in October 2005
NBER Program(s):   HE

The recent rise of specialty hospitals -- typically for-profit firms that are at least partially owned by physicians -- has led to substantial debate about their effects on the cost and quality of care. Advocates of specialty hospitals claim they improve quality and lower cost; critics contend they concentrate on providing profitable procedures and attracting relatively healthy patients, leaving (predominantly nonprofit) general hospitals with a less-remunerative, sicker patient population. We find support for both sides of this debate. Markets experiencing entry by a cardiac specialty hospital have lower spending for cardiac care without significantly worse clinical outcomes. In markets with a specialty hospital, however, specialty hospitals tend to attract healthier patients and provide higher levels of intensive procedures than general hospitals.

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Document Object Identifier (DOI): 10.3386/w11707

Published: Barro, Jason R. & Huckman, Robert S. & Kessler, Daniel P., 2006. "The effects of cardiac specialty hospitals on the cost and quality of medical care," Journal of Health Economics, Elsevier, vol. 25(4), pages 702-721, July. citation courtesy of

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