New research found receiving care from an expensive hospital in a concentrated market increases spending but has no detectable effect on mortality. Researchers analyzed whether receiving care from higher-priced hospitals leads to lower mortality.
Their analysis relied on data from HCCI database, which comprised of insurance claims for individuals with health insurance from Aetna, Humana, and UnitedHealthcare.
Being admitted to a hospital with two standard deviations higher prices raises spending by 52% and lowers mortality by 1 percentage point (35%). However, the relationship between higher prices and lower mortality is only present at hospitals in less concentrated markets. Receiving care from an expensive hospital in a concentrated market increases spending but has no detectable effect on mortality.
- Do Higher-Priced Hospitals Deliver Higher-Quality Care? Working Paper 29809. NBER. February 2022