CHE Seminar - Does containing costs reduce hospital quality?

Event details

Abstract:

To ensure the sustainability of health systems, policymakers aim to contain costs without affecting quality of care. This study investigates the causal effect of being discharged from hospital on the same day as admission, therefore reducing inpatient length of stay, on quality of care. Using hospital administrative data for English NHS hospitals between 2010 and 2014, we focus on emergency patients presenting with chest pain, which is a common reason for attendance at the Emergency Department. We implement an instrumental variable strategy to account for possible unobserved patient severity. Our instrument uses variation in patient exposure to a major policy, introduced in 2012, which financially incentivised hospitals to discharge chest pain patients on the same day as admission rather than keeping them overnight. OLS results show that being discharged on the same day is associated with better quality, measured by lower 28-day emergency readmission rates by around 10 percent. Our IV results however indicate no causal effect of being discharged on the same day on the probability of being readmitted within 28 days. The results therefore suggest that reductions in costs can be achieved without harming quality of care.