Efficiency of Hospitals

One of my favorite blogs is Nate Silver's FiveThirtyEight.  It started as a political blog and is named after the number of electoral votes which he has predicted nearly correctly the last two presidential elections.  He wrote a great book called The Signal and the Noise which looks at a lot of different predictions from weather to politics and uses econometrics to make its predictions. Coming out of that endeavor Silver has put together quite a team at his website and among many different topics is economics.

One of the things we study with our students in economics is efficiency.  So this blog post looks at the efficiency of hospitals.  538 looked at 3.5 million heart attacks and measured productivity by using the measurement of how long the patients lived after their heart attacks.  How long the patients lived was then run in a multivariate regression using normal SES factors and this led to a measure of efficiency.  538 found that urban hospitals were more efficient than rural, teaching more than non-teaching, interestingly non profit more than profit and busier more than not so busy.  Also incredibly interesting was the finding that patients were often taken by ambulance to the more efficient hospital even if though it meant traveling further WITH the patient still suffering!

So you might want to share this with your students, asking if the test is a fair application and if so what implications it might lead to for hospitals.