Does the study control for the complexity of procedures performed or the prior health of the patients being treated? Name brand medical centers often take care of patients with far more complex medical problems than your typical hospital. Lower-tier hospitals even transfer difficult cases into the hands of top-tier centers — and in many cases hand over complete train-wrecks to top centers in hopes that they’ll be able to clean things up. Looking at mortality rates alone is misleading at best.

“State health officials have tried to encourage women like Dahl to reconsider their flight to Boston, pointing out in a 2003 study that community hospitals are generally just as reliable as teaching hospitals for normal births.”

The study refers only to “normal” births. Of course, it’s impossible to know in advance whether you will have a “normal” birth. That’s why you consider going to a well-known hospital. For example, what if your baby needs emergency treatment upon delivery and the community hospital is not adequately staffed to provide it? You generally don’t have a heck of a lot of time. Are you really willing to roll the dice on the well-being of your baby?

There’s no doubt that one typically has to pay a premium to get treatment at top-tier medical centers (at the same time, these centers are not as much in the habit of denying patient care because of insurance reimbursement issues as a private practice might be). There’s also no doubt that name brand medical centers are far from perfect. I can’t tell what, if any, premium you should be paying. But to cite some dubious studies that leaves out valuable information is highly misleading.

I wasn’t trying to provide a competing explanation, I was warning Mr. Hanson against using the medical sector of all sectors as a test case for his novel ideas. He notices that people don’t do what one would normally expect in a regular market: prefer the cheaper over the more expensive (for a given level of quality) and choose the better over the worse (for a given price). But this is precisely the sort of departure one should expect in response to government interference that makes it extremely difficult compare prices and compare quality. It’s difficult even to know the price of the procedure one is about to receive. Doctors certainly are not eager to share it with you, and even if they did, you get multiple bills (or your insurance does) from various providers – not just the doctor but the hospital and the anesthesiologists, for instance. You receive one bill, you pay it off, and you think you’re done, but then you receive another, and another. You don’t know it’s all paid off until you stop receiving bills. And the bills are incomprehensible, and some of the items are outrageous – hundreds of dollars just to lie semi-conscious in a room for a couple of hours after surgery, for example. This is nothing like a typical capitalist market sector. Of course it’s hard for people to act as a microeconomist would normally expect. And I haven’t even mentioned the shielding effect of insurance (which is strongly encouraged by tax policy) on all this. As far as reputation, Beth Israel has a fantastic reputation, thought of very highly (I live in the area), whereas I have no such impression of Mass. General, so the notion that Beth Israel is lower status than Mass. General strikes me as being nothing other than an arbitrarily inserted presupposition to fit with the observed difference in payments. Just find the highest-paid hospital, call it “high status”, and voila, you have your explanation.

It is not a theory but a reminder that the economy is not happening in laboratory conditions. Physicists isolate what they’re studying very carefully from uncontrolled variables. Economists, understandably, cannot do this, but for this reason they should be mindful of them. I did not notice any manifestations of such mindfulness. On the contrary: a reminder to be mindful has been rejected as not “of much use”.

The theory that people seek connections with high status people leads to lots of concrete expectations.

Maybe, maybe not. Look at what people are moving in the direction of to a degree that is not accounted for by your initial model, label it “high status”, and voila, you have your “concrete expectation” that people are moving in that direction.

How much of the data is self-reported by hospitals? What if their reporting procedures are different? Are they controlling for all the relevant variables? What if the people in the more prestigious hospital tend to be sicker than others? I’d bet they tend to be older, since older people tend to be wealthier and more able to afford expensive medicine. How well can they control for the severity of the conditions?

I just can’t see really sick people caring about prestige. All the really sick people I’ve been around didn’t. They just wanted to get better, and to get better as quickly as possible.

I agree with Tomasz. There is obviously some correlation between prestige and quality of care, e.g. most people don’t go to witch doctors and faith healers. I can believe that this correlation is very low, because people do prefer to associate with others of higher status and are willing to pay for this privilege. What I find much more difficult to accept is that they would risk their own health to do so.

One problem that I’ve run into myself is that it is very hard for a layman to get a hold of data on health outcomes (for procedures or hospitals).

Yes patients want prestigious docs and hospitals, and they may believe that high status docs are healthier, but I doubt that belief causes their demand; causation most likely goes the other way.

I think that I as a consumer rely on a general rule to the effect of “more expensive –> better quality”, especially in fields like medicine where, relative to other services, I would expect the wealthy to care more about actual effectiveness. Even if I’m wrong to expect that the wealthy think that way, or about the implication “more expensive –> better quality” in general, still this belief would influence my buying choices. In the aggregate, this would add to the demand of more-expensive hospitals. So the additional cost of some hospitals would really be due to a perception that they provide better service, not to my desire to affiliate with high-status docs.

Certainly status could explain why one hospital, rather than another, became more expensive in the first place. But once it is more expensive, I would expect patients’ desire for better care to keep it that way, even in the absence of any evidence besides the price that the care there is better.

Or are you saying the correlation between quality of healthcare and prestige/price as averaged over all healthcare providers is negative or very definitely exactly zero? I seriously doubt that.

@retired urologist: I think the quality of care you can receive for common interventional procedures is probably equivalent at top community centers (maybe even superior) than at an academic center. However, for elective procedures (lots of cath, angioplasty, CABG, spine surgery, low risk prostate) — I really, really have to wonder whether the risks and benefits to intervene (and generate $$$) is provided to the patient in the most honest way. Although the outcome is good — the question of whether or not you even needed the intervention — and where you’ll get an honest answer on that, is a whole other story. At least at some academic centers, there will be people conducting trials on said intervention, and whether or not it helps.