NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Uncovering Waste in U.S. Healthcare

Joseph Doyle, John Graves, Jonathan Gruber

NBER Working Paper No. 21050
Issued in March 2015
NBER Program(s):   AG   HC   HE   PE

There is widespread agreement that the US healthcare system wastes as much as 5% of GDP, yet little consensus on what care is actually unproductive. This partly arises because of the endogeneity of patient choice of treatment location. This paper uses the effective random assignment of patients to ambulance companies to generate comparisons across similar patients treated at different hospitals. We find that assignment to hospitals whose patients receive large amounts of care over the three months following a health emergency do not have meaningfully better survival outcomes compared to hospitals whose patients receive less. Outcomes are related to different types of treatment intensity, however: patients assigned to hospitals with high levels of inpatient spending are more likely to survive to one year, while those assigned to hospitals with high levels of outpatient spending are less likely to do so. This adverse effect of outpatient spending is predominately driven by spending at skilled nursing facilities (SNF) following hospitalization. These results offer a new type of quality measure for hospitals based on utilization of SNFs. We find that patients quasi-randomized to hospitals with high rates of SNF discharge have poorer outcomes, as well as higher downstream spending once conditioning on initial hospital spending.

download in pdf format
   (441 K)

email paper

The NBER Bulletin on Aging and Health provides summaries of publications like this.  You can sign up to receive the NBER Bulletin on Aging and Health by email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w21050

Users who downloaded this paper also downloaded* these:
Doyle, Graves, Gruber, and Kleiner w17936 Do High-Cost Hospitals Deliver Better Care? Evidence from Ambulance Referral Patterns
Haviland, Eisenberg, Mehrotra, Huckfeldt, and Sood w21031 Do “Consumer-Directed” Health Plans Bend the Cost Curve Over Time?
Chandra, Finkelstein, Sacarny, and Syverson w19200 Healthcare Exceptionalism? Productivity and Allocation in the U.S. Healthcare Sector
Gruber and McKnight w20462 Controlling Health Care Costs Through Limited Network Insurance Plans: Evidence from Massachusetts State Employees
Duggan, Gruber, and Vabson w21650 The Efficiency Consequences of Health Care Privatization: Evidence from Medicare Advantage Exits
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us