Ruhr Economic Papers

Ruhr Economic Papers #779

Do Higher Hospital Reimbursement Prices Improve Quality of Care?

by Martin Salm and Ansgar Wübker

RUB, RWI, 12/2018, 45 S./p., 8 Euro, ISBN 978-3-86788-907-0 DOI: 10.4419/86788907

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Abstract

Does higher medical spending improve quality of care? We estimate the effect of
changes in regulated reimbursement prices for hospitals on multiple dimensions of
hospital quality, including mortality outcomes, surgical complications, process quality,
and patient satisfaction. We exploit an exogenous variation in reimbursement prices
between the years 2006 and 2010 based on a reform of hospital financing in Germany.
We find that changes in reimbursement prices do not affect quality of care. This effect is
precisely estimated, and we can rule out effect sizes that are large relative to the overall
variation in quality indicators across hospitals.

JEL-Classification: I11, H51, D22

Keywords: Health care expenditures; hospital care; quality of care

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