Productivity and quality in health care: Evidence from the dialysis industry

Journal Article (Journal Article)

We show that healthcare providers face a tradeoffbetween increasing the number of patients they treat and improving their quality of care. To measure the magnitude of this quality-quantity tradeoff, we estimate a model of dialysis provision that explicitly incorporates a centre's unobservable and endogenous choice of treatment quality while allowing for unobserved differences in productivity across centres. We find that a centre that reduces its quality standards such that its expected rate of septic infections increases by 1 percentage point can increase its patient load by 1.6%, holding productivity, capital, and labour fixed; this corresponds to an elasticity of quantity with respect to quality of -0.2. Notably, our approach provides estimates of productivity that control for differences in quality, whereas traditional methods would misattribute lower-quality care to greater productivity.

Full Text

Duke Authors

Cited Authors

  • Grieco, PLE; Mcdevitt, RC

Published Date

  • January 1, 2017

Published In

Volume / Issue

  • 84 / 3

Start / End Page

  • 1071 - 1105

Electronic International Standard Serial Number (EISSN)

  • 1467-937X

International Standard Serial Number (ISSN)

  • 0034-6527

Digital Object Identifier (DOI)

  • 10.1093/restud/rdw042

Citation Source

  • Scopus