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Natural Disasters and Elective Medical Services: How Big is the Bounce-Back?

Author

Listed:
  • Tatyana Deryugina
  • Jonathan Gruber
  • Adrienne Sabety

Abstract

COVID-19 has created a dual set of stresses on health care systems worldwide: a rise in expensive intensive care services and a dramatic decline in elective services. The U.S. government has responded with both grant and loan programs to help health care providers weather the storm. But the optimal size and nature of such programs are hard to evaluate without an understanding of the ability of providers to make up their lost elective service revenues over time. In this paper, we study the closest relevant parallel to the reduction in elective services seen under COVID-19: hurricanes. We match information on hurricanes to data on Medicare hospital elective visits and charges from 1997-2013, comparing counties impacted by hurricanes to nearby unaffected counties. We find that the average hurricane reduces elective services by about 7% in the month it makes landfall. For the most severe hurricanes, we estimate a reduction of more than 20%. Services return to baseline fairly rapidly, but for severe hurricanes it takes a year or more to make up lost revenues. Projections based on variation in hurricane severity suggest that it will take over 3 years for providers to make up the lost revenue from COVID-19.

Suggested Citation

  • Tatyana Deryugina & Jonathan Gruber & Adrienne Sabety, 2020. "Natural Disasters and Elective Medical Services: How Big is the Bounce-Back?," NBER Working Papers 27505, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:27505
    Note: AG EEE EH PE
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    References listed on IDEAS

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    1. Tatyana Deryugina & Laura Kawano & Steven Levitt, 2018. "The Economic Impact of Hurricane Katrina on Its Victims: Evidence from Individual Tax Returns," American Economic Journal: Applied Economics, American Economic Association, vol. 10(2), pages 202-233, April.
    2. Tatyana Deryugina, 2017. "The Fiscal Cost of Hurricanes: Disaster Aid versus Social Insurance," American Economic Journal: Economic Policy, American Economic Association, vol. 9(3), pages 168-198, August.
    3. Mr. Michael Keen & Mr. Paul K. Freeman & Mr. Muthukumara Mani, 2003. "Dealing with Increased Risk of Natural Disasters: Challenges and Options," IMF Working Papers 2003/197, International Monetary Fund.
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    RePEc Biblio mentions

    As found on the RePEc Biblio, the curated bibliography for Economics:
    1. > Economics of Welfare > Health Economics > Economics of Pandemics > Specific pandemics > Covid-19 > Economic policy > Business support

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    Cited by:

    1. Engy Ziedan & Kosali I. Simon & Coady Wing, 2022. "Mortality Effects of Healthcare Supply Shocks: Evidence Using Linked Deaths and Electronic Health Records," NBER Working Papers 30553, National Bureau of Economic Research, Inc.

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    More about this item

    JEL classification:

    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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