Abstract
In 2010–2012, new outpatient service locations were established in poor Hungarian micro-regions. 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.
Highlights
How to best allocate limited public resources across outpatient and inpatient healthcare services to achieve maximum improvement in health outcomes is one of the perennial questions of health policy all over the world.To inch closer to answering that question, we have to understand, disentangle, and accurately measure the relationships between those two levels of care
Such evidence can help policy makers to decide whether additional public resources are put to better use by being channelled toward expanding outpatient or inpatient care
Odds ratios (i.e. exp( d) ) are shown, which roughly correspond in the case of inpatient care to multiplicative changes in probabilities, because hospitalization is relatively rare in the population
Summary
How to best allocate limited public resources across outpatient and inpatient healthcare services to achieve maximum improvement in health outcomes is one of the perennial questions of health policy all over the world.To inch closer to answering that question, we have to understand, disentangle, and accurately measure the relationships between those two levels of care. At the highest level of abstraction, nationwide health policy planning is about maximizing health outcomes of the population constrained by limited public and private resources This is done through financing many functional channels of the health care system, but, in OECD countries, most expenditure goes to curative and rehabilitative care, and, within that, two of the most important functions. Are outpatient care, upon which 1.2–7.5% of gross domestic product (GDP) is expended; and inpatient care, with 1.5–3.4% of GDP (2015 data from [17]) Given these enormous expenses, the importance of any reliable evidence that can contribute to even a marginal improvement of health outcomes by a better allocation of resources across these two subsectors cannot be overstated. We first present the possible mechanisms of substitution and complementation and the empirical literature so far, the Hungarian context, followed by the data, the methods, our results and, our conclusions
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