The Economic Impact of Healthcare Quality

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

August 16, 2019

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Format: Chicago

Anne-Line Koch Helsø, Nicola Pierri, and Adelina Yanyue Wang. The Economic Impact of Healthcare Quality, (USA: International Monetary Fund, 2019) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

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.

Subject: Health, Labor, Labor costs, Labor force participation, Labor markets, Wages

Keywords: Earnings loss, Global, Health shocks, Healthcare quality, Hospital admission, Hospital choice, Hospital patient, Hospital productivity, Hospital quality, Labor costs, Labor force participation, Labor market, Labor markets, Labor supply, Low-AEL hospital, Medical condition, Quality measure, Standard deviation, Wages, WP

Publication Details

Pages:

66
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2019/173
Stock No:

WPIEA2019173
ISBN:

9781498324595
ISSN:

1018-5941

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