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American Economic Journal: Applied Economics: Vol. 3 No. 3 (July 2011)

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Returns to Local-Area Health Care Spending: Evidence from Health Shocks to Patients Far from Home

Article Citation

Doyle, Joseph J. 2011. "Returns to Local-Area Health Care Spending: Evidence from Health Shocks to Patients Far from Home." American Economic Journal: Applied Economics, 3(3): 221-43.

DOI: 10.1257/app.3.3.221

Abstract

Health care spending varies widely across markets, and previous research finds little evidence that higher spending translates into better health outcomes. The main innovation in this paper exploits this cross-sectional variation in hospital spending in a new way by considering emergency patients who are exposed to healthcare systems when they are far from home. Visitors to Florida who become ill in high-spending areas have significantly lower mortality rates compared to visitors in lower spending areas. The results are robust within groups of similar visitors and within groups of destinations that appear to be close demand substitutes -- areas that likely attract similar visitors. (JEL H75, I11, I18)

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Authors

Doyle, Joseph J. (MIT)

JEL Classifications

H75: State and Local Government: Health; Education; Welfare; Public Pensions
I11: Analysis of Health Care Markets
I18: Health: Government Policy; Regulation; Public Health

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