Productivity Dispersion in Medicine and Manufacturing
Amitabh Chandra, Amy Finkelstein, Adam Sacarny, Chad Syverson
American Economic Review · 2016 · Volume 106 · Issue 5
Abstract
The conventional wisdom in health economics is that large differences in average productivity across US hospitals are the result of idiosyncratic features of the healthcare sector which dull the role of market forces. Strikingly, however, we find that productivity dispersion in heart attack treatment across hospitals is, if anything, smaller than in narrowly defined manufacturing industries such as ready-mixed concrete. While this fact admits multiple interpretations, it suggests that healthcare may have more in common with "traditional" sectors than is often assumed, and relatedly, that insights from research on productivity and allocation in other sectors may enrich analysis of healthcare.
Keywords
Production, Cost, Capital, Total Factor, and Multifactor Productivity, Capacity, Analysis of Health Care Markets, Health: Government Policy, Regulation, Public Health
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