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Abstract: There is widespread agreement that the US healthcare system wastes as much as 5% of GDP, yet little consensus on what care is actually unproductive. This partly arises because of the endogeneity of patient choice of treatment location. This paper uses the effective random assignment of patients to ambulance companies to generate comparisons across similar patients treated at different hospitals.

Dr. Carlos Grijalva, MD, MPH, and his colleagues from the multicenter Etiology of Pneumonia in the Community (EPIC) study published their recent findings in the New England Journal of Medicine. They found that respiratory viruses were responsible for 4 out 5 cases of community-acquired pneumonia hospitalizations among children, whereas bacterial infections accounted for fewer than 1 in 10 cases, and a combination of bacterial infections and viruses also accounted for fewer than 1 in 10 cases.

More than 2.5 million people die in the United States each year, most of them from progressive health conditions. Facing death is a profound challenge for patients, their relatives and friends, their caregivers, and health care institutions. Nearly 40 years of intensive work to improve care at the end of life has shown that aligning care with patients' needs and preferences in order to ease the dying process is surprisingly difficult — although there has been some incremental progress.

We consider whether hospitals that receive higher payments from Medicare improve patient outcomes, using exogenous variation in ambulance company assignment among patients who live near one another. Using Medicare data from 2002–10 on assignment across ambulance companies and New York State data from 2000–6 on assignment across area boundaries, we find that patients who are brought to higher-cost hospitals achieve better outcomes.