Under Pressure: Hospital Crowding and Healthcare Quality in Colombia

This paper examines the effect of hospital crowding on healthcare dynamics and patient health outcomes. Crowding is expected to lower the quality of care by worsening patient-level outcomes, such as 7-day readmissions and in-hospital mortality, and by altering treatment decisions. By exploiting fluctuations in hospital occupancy using hospital records from the Colombian health system (2017–2019), I find that, for emergency departments, crowding increases the probability of 7- day readmissions by 2.1 percentage points. For hospitalizations, the probability of returning within 7 days rises by 2.7 percentage points under high occupancy. No significant effects are found for in-hospital mortality. Crowding reduces referrals and hospitalizations from EDs and increases the length of stay in hospitalization facilities by nearly 2.5 days. To explore the mechanisms that drive these results, I decompose the effect into type of illness, examine the role of lagged crowding and the impact of market concentration and competition among hospitals. Overall, these results suggest that capacity constraints reduce efficiency and continuity of care in health services. My findings highlight how welfare is affected by hospital crowding and open a discussion on how policymakers can reduce these damages.