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Is it possible that health care patients choose care in the same way they choose cars?

Healthcare Exceptionalism? Performance and Allocation in the U.S. Healthcare Sector
by Amitabh Chandra, Amy Finkelstein, Adam Sacarny, Chad Syverson

NBER Working Paper #21603

The conventional wisdom in health economics is that idiosyncratic features of the healthcare sector leave little scope for market
forces to allocate consumers to higher performance producers. However, we find robust evidence across a variety of conditions and
performance measures that higher quality hospitals tend to have higher market shares at a point in time and expand more over time.
Moreover, we find that the relationship between performance and allocation is stronger among patients who have greater scope for
hospital choice, suggesting a role for patient demand in allocation in the hospital sector.  Our findings suggest that the healthcare
sector may have more in common with “traditional” sectors subject to standard market forces than is often assumed.

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