Returns to specialization: Evidence from the outpatient surgery market

Elizabeth L. Munnich, Stephen T. Parente

Research output: Contribution to journalArticlepeer-review

15 Scopus citations


Technological changes in medicine have created new opportunities to provide surgical care in lower cost, specialized facilities. This paper examines patient outcomes in ambulatory surgery centers (ASCs), which were developed as a low-cost alternative to outpatient surgery in hospitals. Because we are concerned that selection into ASCs may bias estimates of facility quality, we use predicted changes in federally set Medicare facility payment rates as an instrument for ASC utilization to estimate the effect of location of treatment on patient outcomes. We find that patients treated in an ASC are less likely to be admitted to a hospital or visit an emergency room a short time after outpatient surgery. The findings in this paper indicate that factors other than patient and physician heterogeneity contribute to the observed returns to specialization in the ASC market.

Original languageEnglish (US)
Pages (from-to)147-167
Number of pages21
JournalJournal of Health Economics
StatePublished - Jan 2018

Bibliographical note

Publisher Copyright:
© 2017 Elsevier B.V.


  • Ambulatory surgery centers
  • Hospital quality
  • Specialization


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