Hospital Entry Improves Quality: Evidence From Common Medical Conditions

To analyze the determinants and effects of hospital entry, we compare entrants' quality of care to incumbent hospitals. Using national hospital-level patient mortality measures from July 2005 to June 2019 for Medicare patients with common medical conditions (heart attack, heart failure, and pneumonia), we establish that entrant hospitals experience 0.27 to 0.76 fewer deaths per 100 patients than incumbent hospitals in the same markets. We further show that new hospitals enter markets where they can provide higher quality care than incumbent hospitals.