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The closer the better: does better access to outpatient care prevent hospitalization?

Peter Elek (), Tamas Molnar () and Balazs Varadi ()
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Peter Elek: Department of Economics, Eörvös Loránd University (ELTE), Budapest, Hungary
Tamas Molnar: Budapest Institute for Policy Analysis, Budapest, Hungary
Balazs Varadi: Budapest Institute for Policy Analysis, Budapest, Hungary Department of Economics, ELTE

No 1808, IEHAS Discussion Papers from Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences

Abstract: In 2010-2012 new outpatient service locations were established in poor Hungarian microregions. We exploit this quasi-experiment to estimate the extent of substitution between outpatient and inpatient care. Fixed-effects Poisson models on individual-level panel data for years 2008-2015 show that the number of outpatient visits increased by 19% and the number of inpatient stays decreased by 1.6% as a result, driven by a marked reduction of potentially avoidable hospitalization (PAH) (5%). In our dynamic specification, PAH effects occur in the year after the treatment, whereas non-PAH only decreases with a multi-year lag. The instrumental variable estimates suggest that a one euro increase in outpatient care expenditures produces a 0.6 euro decrease in inpatient care expenditures. Our results (1) strengthen the claim that bringing outpatient care closer to a previously underserved population yields considerable health benefits, and (2) suggest that there is a strong substitution element between outpatient and inpatient care.

Keywords: Administrative panel data; Inpatient care; Outpatient care; Potentially avoidable hospitalization; Quasi-experiment; Substitution effect (search for similar items in EconPapers)
JEL-codes: C23 C26 I10 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hea and nep-tra
Date: 2018-04
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