Quality, Selection, and Congestion: Equilibrium Hospital Outcomes During Covid-19

We examine the importance of hospital quality, patient selection, and congestion in affecting equilibrium health outcomes, using Covid-19 pandemic data. Our main outcome is mortality, controlling for unobserved selection with distance instruments. Intensive care unit strain increased hospital mortality: without congestion, deaths would fall 9.6%. Patients value hospitals with high baseline quality, but their choices did not reflect capacity strain information. Equilibrium counterfactuals show that if patients were informed about capacity strain and believed quality signals were more precise, deaths would drop 3.8%. However, using more precise information but not accounting for congestion would cause Covid-19 deaths to rise 3.8%.