Estimating Heterogeneity in the Benefits of Medical Treatment Intensity
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NBER Working Paper No. 15309
Issued in September 2009
NBER Program(s): CH HC HE
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Federal and state laws passed in the late 1990 increased considerably postpartum stays for newborns. Using all births in California over the 1995-2001 period, 2SLS estimates suggest that for the average newborn impacted by the law, increased treatment intensity had modest and statistically insignificant (p-value>0.05) impacts on readmission probabilities. Allowing the treatment effect to vary by pre-existing conditions or the pre-law propensity score of being discharged early, two objective measures of medical need, demonstrates that the law had large and statistically significant impacts for those with the greatest likelihood of a readmission. These results demonstrate heterogeneity in the returns to greater treatment intensity, and the returns to the average and marginal patient vary considerably.
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