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.
This study uses structural vector auto regressions, based on the model by Lutz Kilian, to explore Latin American market exposure to oil demand channels and the influence of these oil demand shocks on five major stock indices in Brazil, Mexico, Chile, Peru, and Colombia. This investigation finds a loosely consistent pattern in the region and significant relationship between precautionary demand shocks and market index returns. Aggregate demand shocks appear to be less significant in most Latin American countries. Additionally, this study investigates the magnitude and time frame by which markets are affected by each type of demand shock.