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Patients achieve better outcomes at hospitals that treat larger numbers of patients with certain diagnoses or who are undergoing particular procedures. However, the causal direction underlying this relationship is less well understood. Do patients treated at institutions with higher volumes of patients achieve better outcomes because the hospital staff and physicians have gained expertise by practice (the “practice makes perfect” hypothesis)? Do hospitals with a community reputation for excellent results attract higher volumes of patients because primary care physicians refer patients to specialists who practice there (the “selective referral” hypothesis)? Or, are both explanations important? This article addresses this question through a detailed analysis of patients with a particular diagnosis: hip fracture. In addition, two measures of patient outcomes are compared: long hospital stays as a proxy for in-hospital complications and in-hospital death.