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

Jonathan Gruber, Thomas P. Hoe, George Stoye

NBER Working Paper No. 24445
Issued in March 2018
NBER Program(s):The Program on Aging, The Health Care Program, The Health Economics Program, The Public Economics Program

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.

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A non-technical summary of this paper is available in the 2018 number 2 issue of the NBER Bulletin on Aging and Health. You can sign up to receive the NBER Bulletin on Aging and Health by email.

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Document Object Identifier (DOI): 10.3386/w24445

 
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