Learning by Doing in Health Care

The study presented in this ZEW Research Seminar shows that a positive relationship between hospital volumes and health outcomes for certain types of medical care is well documented. Most economic literature has focused on econometric challenges around identification of causal effects in the presence of endogenous selection (‘selective referral’). In contrast, few studies have explored the causal mechanisms by which volume affects outcomes. Learning-by-doing (LBD) describes the accumulation of knowledge through experience and is a potential mechanism by which hospitals improve their provision of care over time. The aim of this study, to be discussed today, is to test the theory of LBD using as a case study hospital treatment for COVID-19 complications during the first wave of the pandemic, when hospitals had no prior experience with this disease and there were no standardised treatment pathways or approved vaccines. The authors exploit exogenous regional variation in infection rates over time to identify the effect of cumulative volume of COVID patients treated on 90-day mortality. Their results suggests that experience matters: for every 100 additional COVID-19 patients that a hospital treated prior to the index admission, the probability of death decreases by 0.4 percentage points.