Principal Investigator Retsef Levi
Co-investigators Ernst Berndt , Dimitris Bertsimas , John Carroll , Robert Gibbons , Zen Chu , James P Dougherty , Joseph Doyle , Vivek Farias , David Gamarnik , Katherine Kellogg , Thomas Kochan , Andrew Lo , Paul Osterman , Georgia Perakis , Hazhir Rahmandad , Benjamin Roin , Anjali Sastry , Steven Spear , John Sterman , Catherine Tucker , Eric von Hippel , Juanjuan Zhang
Project Website http://hsi.mit.edu/faculty-research/ongoing-research/do-expensive-hospitals-get…
Some hospitals tend to attract the sickest patients, which could cause poorer outcomes. This hospital would not compare favorably to one that has primarily healthier patients without life-threatening or seriously chronic conditions . In a paper in the Journal of Political Economy, Professor Joseph Doyle and his colleagues have developed a novel approach to avoid this comparison issue: they discovered that within neighborhoods, when someone dials 9-1-1:
the ambulance company that is dispatched to the scene is effectively random, i.e., more than one ambulance company services the area so it is not pre-determined which ambulance company picks up a specific patient, and ambulance drivers do have preferences for some hospitals, (some ambulance companies are affiliated with hospitals).
Combining these two facts - patients are effectively randomly assigned to hospitals. This is an example of a “natural experiment,” i.e., no external researcher assigns patients to a specific hospital. This “random assignment” of patients to hospitals mimics a randomized controlled trial (RCT) in the real world
Records from 2002-2010 of nearly 400,000 Medicare and 250,000 New York state patients show that ambulance companies send emergency care patients within the same neighborhoods to different types of hospitals. The data also show that those patients transported to hospitals that charge Medicare higher rates when they treat patients, get better outcomes. For example, patients going to a hospital that charges $4000 more on average (which is within the range of the data considered), is 20% less likely to die within one year of hospitalization.
These results are of course focused on emergency patients who are transported by ambulance. Can hospitals reduce Medicare spending and still achieve better outcomes, and, more broadly, can they do this for emergency patients and those with chronic conditions? These are questions that the team is tackling, as the drive for improved patient outcomes at lower costs pushes hospitals and physicians to re-evaluate their overall performance.