The health cost of reducing hospital bed capacity

Abstract

In the past two decades, most high-income countries have reduced their hospital bed capacity. This could be a sign of increased efficiency but could also reflect a degradation in quality of care. In this paper, we use repeated cross-sections on mortality and staffed hospital beds per capita in all 21 Swedish regions to estimate the potential death toll from reduced bed capacity. Between 2001 and 2019, mortality and beds decreased across all regions, but regions making smaller bed reductions experienced on average greater decreases in mortality, equivalent to one less death per three beds retained. This estimate is stable to a wide range of specifications and to adjustment for potential confounders, which supports a causal interpretation. Our results imply that by providing one more bed, Swedish health care could produce about three quality-adjusted life years (QALYs) at a cost of SEK 400,000 (∼US$40,000) per QALY. These findings could be informative about the marginal productivity of health care and support the credibility of empirical work attempting to estimate the opportunity cost of funding new healthcare interventions subject to a constrained budget.