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Hospital readmission rates: Signal of failure or success?

Author

Listed:
  • Laudicella, Mauro
  • Li Donni, Paolo
  • Smith, Peter C.

Abstract

Hospital readmission rates are increasingly used as signals of hospital performance and a basis for hospital reimbursement. However, their interpretation may be complicated by differential patient survival rates. If patient characteristics are not perfectly observable and hospitals differ in their mortality rates, then hospitals with low mortality rates are likely to have a larger share of un-observably sicker patients at risk of a readmission. Their performance on readmissions will then be underestimated. We examine hospitals’ performance relaxing the assumption of independence between mortality and readmissions implicitly adopted in many empirical applications. We use data from the Hospital Episode Statistics on emergency admissions for fractured hip in 290,000 patients aged 65 and over from 2003 to 2008 in England. We find evidence of sample selection bias that affects inference from traditional models. We use a bivariate sample selection model to allow for the selection process and the dichotomous nature of the outcome variables.

Suggested Citation

  • Laudicella, Mauro & Li Donni, Paolo & Smith, Peter C., 2013. "Hospital readmission rates: Signal of failure or success?," Journal of Health Economics, Elsevier, vol. 32(5), pages 909-921.
  • Handle: RePEc:eee:jhecon:v:32:y:2013:i:5:p:909-921
    DOI: 10.1016/j.jhealeco.2013.06.004
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    References listed on IDEAS

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Sam Watson’s journal round-up for 21st August 2017
      by Sam Watson in The Academic Health Economists' Blog on 2017-08-21 16:00:35

    Citations

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    Cited by:

    1. Anne-Fleur Roos & Eddy van Doorslaer & Owen O'Donnell & Erik Schut & Marco Varkevisser, 2018. "Does price competition damage healthcare quality?," Tinbergen Institute Discussion Papers 18-040/V, Tinbergen Institute.
    2. Domenico Lisi & Luigi Siciliani & Odd Rune Straume, 2018. "Hospital Competition under Pay-for-Performance: Quality, Mortality and Readmissions," Discussion Papers 18/03, Department of Economics, University of York.
    3. repec:bla:jorssa:v:180:y:2017:i:2:p:409-432 is not listed on IDEAS
    4. Nan Jiang & Gail Pacheco, 2014. "Demand in New Zealand hospitals: expect the unexpected?," Applied Economics, Taylor & Francis Journals, vol. 46(36), pages 4475-4489, December.
    5. repec:eee:hepoli:v:121:y:2017:i:8:p:842-852 is not listed on IDEAS
    6. Dardanoni, V.; & Laudicella, M.; & Li Donni, P.;, 2018. "Hospital Choice in the NHS," Health, Econometrics and Data Group (HEDG) Working Papers 18/04, HEDG, c/o Department of Economics, University of York.
    7. Damien Bricard & Zeynep Or, 2018. "Does an Early Primary Care Follow-up after Discharge Reduce Readmissions for Heart Failure Patients?," Working Papers DT73, IRDES institut for research and information in health economics, revised Mar 2018.
    8. Kuhlmey, Florian & Minke, Matthias, 2018. "Estimating Survival Times Using Swiss Hospital Data," Working papers 2018/14, Faculty of Business and Economics - University of Basel.
    9. Rowena Jacobs & Martin Chalkley & María José Aragón & Jan R. Böhnke & Mike Clark & Valerie Moran & Simon Gilbody, 2016. "Funding of mental health services: Do available data support episodic payment?," Working Papers 137cherp, Centre for Health Economics, University of York.
    10. Stephen Martin & Andrew Street & Lu Han & John Hutton, 2014. "The impact of hospital financing on the quality of inpatient care in England," Working Papers 105cherp, Centre for Health Economics, University of York.

    More about this item

    Keywords

    Hospital performance; Mortality rates; Readmission rates; Sample selection; Hip fractures;

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General

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