The Economic Impact of Healthcare Quality

Anne-Line Koch Helsø, Nicola Pierri and Adelina Yanyue Wang

No 2019/173, IMF Working Papers from International Monetary Fund

Abstract: We study the costs of hospitalizations on patients’ earnings and labor supply, using the universe of hospital admissions in Denmark and full-population tax data. We evaluate the quality of treatment based on its ability to mitigate the labor market consequences of a given diagnosis and propose a new measure of hospital quality, the "Adjusted Earning Losses" (AEL). We find a 4 percentage points difference in lost earnings between the best and worst large Danish hospitals, all else equal. We show that AEL contains significant additional information relative to traditional measures and does not suffer from worse selection issues. We also document a large decline in the labor cost of hospitalizations over time, with large variations across diseases. We find that the average post-hospitalization reduction in labor earnings declined by 25 percent (50 percent) on the intensive (extensive) margin between 1998 and 2012.

Keywords: WP; labor market; hospital admission; medical condition; standard deviation; Hospital quality; healthcare quality; health shocks; labor supply; hospital productivity; quality measure; earnings loss; hospital choice; low-AEL hospital; hospital patient; Wages; Labor markets; Labor costs; Labor force participation; Global (search for similar items in EconPapers)
Pages: 66
Date: 2019-08-16
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=47049 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2019/173

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().