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Estimating Heterogeneity in the Benefits of Medical Treatment Intensity

  • William N. Evans

    (Department of Economics, University of Notre Dame)

  • Craig Garthwaite

    (Department of Management and Strategy, Kellogg School of Management, Northwestern University)

We exploit increases in postpartum length of stay generated by legislative changes in the late 1990s to identify the impact of greater hospital care on the health of newborns. Using all births in California over the 1995–2000 period, two-stage least-square estimates show that increased treatment intensity had a modest impact on readmission probabilities for the average newborn. Allowing the treatment effect to vary by two objective measures of medical need demonstrates that the law had large impacts for those with the greatest likelihood of a readmission. The results suggest that the returns to average and marginal patients vary considerably in this context. © 2012 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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Article provided by MIT Press in its journal Review of Economics and Statistics.

Volume (Year): 94 (2012)
Issue (Month): 3 (August)
Pages: 635-649

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Handle: RePEc:tpr:restat:v:94:y:2012:i:3:p:635-649
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