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Saving Lives by Tying Hands: The Unexpected Effects of Constraining Health Care Providers

Author

Listed:
  • Jonathan Gruber
  • Thomas P. Hoe
  • George Stoye

Abstract

The emergency department (ED) is a complex node of healthcare delivery that is facing market and regulatory pressure across developed economies to reduce wait times. In this paper we study how ED doctors respond to such incentives, by focussing on a landmark policy in England that imposed strong incentives to treat ED patients within four hours. Using bunching techniques, we estimate that the policy reduced affected patients’ wait times by 19 minutes, yet distorted a number of medical decisions. In response to the policy, doctors increased the intensity of ED treatment and admitted more patients for costly inpatient care. We also find a striking 14% reduction in mortality. To determine the mechanism behind these health improvements, we exploit heterogeneity in patient severity and hospital crowding, and find strongly suggestive evidence that it is the reduced wait times, rather than the additional admits, that saves lives. Overall we conclude that, despite distorting medical decisions, constraining ED doctors can induce cost-effective reductions in mortality.

Suggested Citation

  • Jonathan Gruber & Thomas P. Hoe & George Stoye, 2018. "Saving Lives by Tying Hands: The Unexpected Effects of Constraining Health Care Providers," NBER Working Papers 24445, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:24445
    Note: AG HC HE PE
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    References listed on IDEAS

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    1. Rebecca Diamond & Petra Persson, 2016. "The Long-term Consequences of Teacher Discretion in Grading of High-stakes Tests," NBER Working Papers 22207, National Bureau of Economic Research, Inc.
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    6. Liran Einav & Amy Finkelstein & Maria Polyakova, 2018. "Private Provision of Social Insurance: Drug-Specific Price Elasticities and Cost Sharing in Medicare Part D," American Economic Journal: Economic Policy, American Economic Association, vol. 10(3), pages 122-153, August.
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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Thesis Thursday: Thomas Hoe
      by Chris Sampson in The Academic Health Economists' Blog on 2018-07-19 06:00:52

    Citations

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    Cited by:

    1. Knutsson, Daniel & Tyrefors, Björn, 2020. "Quality and Efficiency Between Public and Private Firms: Evidence From the Ambulance Services," Working Paper Series 1365, Research Institute of Industrial Economics.
    2. Woodworth, Lindsey, 2020. "Swamped: Emergency Department Crowding and Patient Mortality," Journal of Health Economics, Elsevier, vol. 70(C).
    3. Fadlon, Itzik & Van Parys, Jessica, 2020. "Primary care physician practice styles and patient care: Evidence from physician exits in Medicare," Journal of Health Economics, Elsevier, vol. 71(C).
    4. Elena Lucchese, 2020. "It could be worse...it could be raining: Ambulance response time and health outcomes," Working Papers 429, University of Milano-Bicocca, Department of Economics, revised Feb 2020.
    5. Alex J. Turner & Laura Anselmi & Yiu‐Shing Lau & Matt Sutton, 2020. "The effects of unexpected changes in demand on the performance of emergency departments," Health Economics, John Wiley & Sons, Ltd., vol. 29(12), pages 1744-1763, December.

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    More about this item

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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