Existing literature on hospital pricing and price variation is split on whether price differentials in hospital billing are demand or supply led. To harmonize this literature, we use data from the Medicare Hospital Compare website to evaluate the interaction between demand and supply factors that influence hospital pricing structure. We use consumers’ net willingness-to-pay (net WTP) as the dependent variable to analyze how providers exploit factors that enable a provider to charge high prices to consumers. We find that high prices are reflective of the perceived quality but find no relationship with the actual quality of care. In line with previous literature, our analysis shows no evidence of cross- subsidization between inpatient DRGs. However, we find no interaction of factors that could adequately explain the full extent of observed variation in provider prices. We conclude that the question, “Should I buy here or keep driving?” is complex and cannot be answered by a simple analysis of which healthcare provider is cheaper.
In April of 2013, Colorado College hosted a momentous entrepreneurial event for its students. The Big Idea was a pitch event where Colorado College students presented their project idea before a panel of five judges in order to compete for $50,000 in funding towards the project. The panel reviewed the project ideas based on financial stability, effect on quality of life, feasibility and presentation, and the potential impact of the project on the world. In this video clip, entrepreneurs Benjamin Munyao and Paul-miki Akpablie present their Big Idea, KickHub.