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The Role of Hospital Heterogeneity in Measuring Marginal Returns to Medical Care: A Reply to Barreca, Guldi, Lindo, and Waddell

By Douglas Almond, Joseph J. Doyle, Amanda E. Kowalski and Heidi Williams


In , we describe how marginal returns to medical care can be estimated by comparing patients on either side of diagnostic thresholds. Our application examines at-risk newborns near the very low birth weight threshold at 1500 g. We estimate large discontinuities in medical care and mortality at this threshold, with effects concentrated at "low-quality" hospitals. Although our preferred estimates retain newborns near the threshold, when they are excluded the estimated marginal returns decline, although they remain large. In low-quality hospitals, our estimates are similar in magnitude regardless of whether these newborns are included or excluded. Copyright 2011, Oxford University Press.

DOI identifier: 10.1093/qje
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