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Capacity and Utilization in Health Care: The Effect of Empty Beds on Neonatal Intensive Care Admission

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  • Seth Freedman

Abstract

Because geographic variation in medical care utilization is jointly determined by both supply and demand, it is difficult to empirically estimate whether capacity itself has a causal impact on utilization in health care. In this paper, I exploit short-term variation in Neonatal Intensive Care Unit (NICU) capacity that is unlikely to be correlated with unobserved demand determinants. I find that available NICU beds have little to no effect on NICU utilization for the sickest infants, but do increase utilization for those in the range of birth weights where admission decisions are likely to be more discretionary. (JEL I11, I12, I18, J13)

Suggested Citation

  • Seth Freedman, 2016. "Capacity and Utilization in Health Care: The Effect of Empty Beds on Neonatal Intensive Care Admission," American Economic Journal: Economic Policy, American Economic Association, vol. 8(2), pages 154-185, May.
  • Handle: RePEc:aea:aejpol:v:8:y:2016:i:2:p:154-85
    Note: DOI: 10.1257/pol.20120393
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    Citations

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    Cited by:

    1. Freedman, Seth & Lin, Haizhen & Simon, Kosali, 2015. "Public health insurance expansions and hospital technology adoption," Journal of Public Economics, Elsevier, vol. 121(C), pages 117-131.
    2. Jürges, Hendrik & Köberlein, Juliane, 2013. "First do no harm. Then do not cheat: DRG upcoding in German neonatology," MEA discussion paper series 201307, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
    3. Hendrik Jürges & Juliane Köberlein, 2013. "First Do No Harm. Then Do Not Cheat: DRG Upcoding in German Neonatology," CESifo Working Paper Series 4341, CESifo Group Munich.
    4. Mindy Marks & Kate Choi, 2011. "Baby Boomlets and Baby Health: Hospital Crowdedness, Treatment Intensity, and Infant Health," Working Papers 201440, University of California at Riverside, Department of Economics.

    More about this item

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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