Heavy industry regulations, hospitalization, and medical expenditures: Evidence from micro-level medical records in a northeast Chinese city

Abstract

Heavy industry regulations are expected to significantly contribute to enhancing public health and reducing social health costs. Based on microlevel medical records from a northeast Chinese city, we prove that environmental regulations targeting heavy industry plants significantly decrease hospitalization rates and medical expenditures. Specifically, the rate of hospitalization decreases by 0.165 per 10,000 population per day for respiratory, cardiovascular, cerebrovascular, pulmonary, brain disease and adverse pregnancies, especially for those aged 0–15 years or older than 45 years. Our mechanistic analysis highlights that the reduction in hospitalization rates is attributed to the decreased concentrations of SO2 and NOx. Further analysis shows that heavy industry regulations lead to a reduction of 100,000 CNY in total medical expenditures within a span of 15 days for each plant. However, the benefits in medical costs remain significantly lower than the economic costs incurred by the policies.