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Does the Marginal Hospitalization Save Lives? The Case of Respiratory Admissions for the Elderly

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  • Janet Currie
  • David Slusky
Abstract
Some commentators estimate that up to a third of U.S. medical spending may be wasted. This study focuses on the decision to hospitalize elderly Medicare patients who present at the emergency room (ER) with respiratory conditions. Failing to hospitalize sick patients could have dire consequences. However, in addition to generating higher costs, unnecessary hospitalization puts patients at risk of hospital acquired conditions and disrupts their lives. We use variation in the patient’s nearest hospital’s propensity to admit patients with similar observable characteristics as an instrument for the admission decision. While OLS estimates suggest that admitted patients are more likely to die, when we instrument for patient admission we find that the marginal hospital admission increases the number of hospital days by seven days and increases charges by $42,000 but has no effect on the risk of death in the course of the next year. The marginal hospitalization also reduces the risk of another emergency department visit in the next 30 days but increases outpatient visits over the same time horizon with no overall impact on charges. Longer term effects also include increased outpatient visits but effects on patient costs and health outcomes over the next year are minimal. Overall, these results lend support to the argument that in many cases the marginal hospitalization is unnecessary.

Suggested Citation

  • Janet Currie & David Slusky, 2020. "Does the Marginal Hospitalization Save Lives? The Case of Respiratory Admissions for the Elderly," NBER Working Papers 26618, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:26618
    Note: AG EH
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    References listed on IDEAS

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    3. Emilio Gutierrez & Adrian Rubli, 2021. "Shocks to Hospital Occupancy and Mortality: Evidence from the 2009 H1N1 Pandemic," Management Science, INFORMS, vol. 67(9), pages 5943-5952, September.
    4. Bhalotra, Sonia & Nunes, Letícia & Rocha, Rudi, 2023. "Emergency Care Centers, Hospital Performance and Population Health," CAGE Online Working Paper Series 659, Competitive Advantage in the Global Economy (CAGE).
    5. Ginger Zhe Jin & Ajin Lee & Susan Feng Lu, 2022. "Patient Routing to Skilled Nursing Facilities: The Consequences of the Medicare Reimbursement Rule," Management Science, INFORMS, vol. 68(12), pages 8722-8740, December.
    6. Ketcham, Jonathan & Kuminoff, Nicolai & Saha, Nirman, 2023. "Valuing Statistical Life Using Seniors' Medical Spending," RFF Working Paper Series 23-16, Resources for the Future.
    7. Atul Gupta & Sabrina T Howell & Constantine Yannelis & Abhinav Gupta, 2021. "Does Private Equity Investment in Healthcare Benefit Patients? Evidence from Nursing Homes," Working Papers 2021-20, Becker Friedman Institute for Research In Economics.

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    JEL classification:

    • I1 - Health, Education, and Welfare - - Health

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