29 January 2009 PUSH Post

Public United for Savings in Healthcare

Q-Quality

Hospitals as hotels: The role

of patient amenities in
hospital demand
Dana Goldman, John A. Romley
Working Paper
National Bureau of Economic Research
Cambridge, MA, USA
December 2008

"Hospitals may also differentiate

themselves in another dimension
of quality, amenities. Indeed,
Newhouse (1994) likens the
hospital enterprise to that of an
airline, for which good food,
Promoting or advertising of healthcare facilities focuses on positioning new,
attentive staff and pleasant
"cutting edge" technologies or highlighting the "touchy-feely" aspects of
surroundings are plausibly healing. Statistics and hard facts are unpalatable.
important aspects of the overall
service. ... a one-standard-
deviation increase in amenities The authors summarise the overall economic impact of their findings by stating:
raises a hospital's demand among "These analyses were motivated in part by a concern that limited price competition
these patients by 38.4% on under fee-for-service reimbursement could lead to a wasteful "arms race" in medical
services, with more intense competition resulting in greater waste." In a country like
average, whereas demand is
India where there is no mechanism for obtaining a certificate of need before starting a
substantially less responsive new medical service, almost all new additions are accompanied by a frenzy of
[12.7%] to clinical quality..." advertising that attempts to sell unreal promises.

Dr Arjun Rajagopalan
PUSH Post 29 January 2009

Using this arbitrary and

eminently debatable
taxonomy shown in the
chart alongside, quality
assurance procedures in
health care could be viewed
as applying an element from
the right half (Quality
assurance) to the left half
(Health care service). A
common example would be
reporting of mortality as a
conventional outcome index
of an invasive curative
therapy.

The possibilities are

limitless, even accepting this
off-the-cuff approach.
Herein, lies the problem of
using quality assurance
measures to evaluate the
worth of a healthcare
service. It is much easier for
all, patients and providers,
to relate to ambience and
published lists of facilities
available.

Much more at:

Dr Arjun Rajagopalan