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To evaluate the effects of specification choices on the accuracy of estimates in difference‐in‐differences (DID) models.

Process‐of‐care quality data from Hospital Compare between 2003 and 2009.

We performed a Monte Carlo simulation experiment to estimate the effect of an imaginary policy on quality. The experiment was performed for three different scenarios in which the probability of treatment was (1) unrelated to pre‐intervention performance; (2) positively correlated with pre‐intervention levels of performance; and (3) positively correlated with pre‐intervention trends in performance. We estimated alternative DID models that varied with respect to the choice of data intervals, the comparison group, and the method of obtaining inference. We assessed estimator bias as the mean absolute deviation between estimated program effects and their true value. We evaluated …