Class 6: Basics of Hospital Pricing

In this module, we’ll introduce the idea of “selection on observables” and the different ways to exploit that idea to make casual statements. We’ll do this in the context of hospital pricing, the research question being whether and to what extent hospitals receiving a financial penalty also raise their prices.

Readings and other links

Links to papers are listed alongside the full reference. PDFs of each paper are also available on Canvas.

• Required readings for this module:
  • Chapter 5 of Causal Inference: The Mixtape
  • Chapter 14 of The Effect: An Introduction to Research Design and Causality
• Supplemental information and readings:
  • Chapters 1-2, and 4 of Causal Inference: The Mixtape
  • Chapters 1-5, 10, and 13 of The Effect: An Introduction to Research Design and Causality
  • Chapters 2-3 of (Angrist and Pischke 2009)
  • (Darden, McCarthy, and Barrette 2018)
  • (Cooper et al. 2019). Link to paper here.
• Data for this module:
  • Hospital Cost Report Information System (HCRIS) repository
  • See also a similar repository here from Adam Sacarny

References

Angrist, J., and J. Pischke. 2009. Mostly Harmless Econometrics. Princeton, NJ: Princeton University Press.

Cooper, Zack, Stuart V Craig, Martin Gaynor, and John Van Reenen. 2019. “The Price Ain’t Right? Hospital Prices and Health Spending on the Privately Insured.” Quarterly Journal of Economics 134 (1): 51–107.

Darden, Michael, Ian McCarthy, and Eric Barrette. 2018. “Who Pays in Pay-for-Performance? Evidence from Hospital Pricing.” Working {Paper} w24304. National Bureau of Economic Research.