In this paper, we address the issue of spurious correlation in the production of health in a systematic way. Spurious correlation entails the risk of linking health status to medical (and nonmedical) inputs when no links exist. This note first presents the bounds testing procedure as a method to...

There have been many studies of the volume-outcome relationship. In all of these, the unit of analysis is the hospital or physician. However, this level of analysis is mostly limited to the use of in-hospital mortality rates and is particularly sensitive to selective referral. Moreover, the...

The paper studies the incentive for providers to invest in new health care technologies under alternative payment systems, when the patients' benefits are uncertain. If the reimbursement by the purchaser includes both a variable (per patient) and a lump-sum component, efficiency can be ensured...