Structural Estimation of Intertemporal Externalities on ICU Admission Decisions

69 Pages Posted: 24 Apr 2020 Last revised: 11 Aug 2021

See all articles by Yiwen Shen

Yiwen Shen

Hong Kong University of Science & Technology (HKUST) - Department of Information Systems, Business Statistics and Operations Management

Carri Chan

Columbia University - Columbia Business School

Fanyin Zheng

Columbia University - Columbia Business School

Gabriel J. Escobar

Kaiser Permanente

Date Written: March 31, 2020

Abstract

Service systems’ behavior can be affected by multiple factors. In the case of intensive care units (ICUs), which admit patients from four primary loci (the emergency department (ED), scheduled patients, planned transfers from other ICUs, and unplanned transfers), it is known that admission rates of some patients decrease as occupancy increases. It is also known that, for at least some conditions, ICU admission is not just a function of patients’ illness, and that a significant proportion of the variation in ICU admission rates is due to hospital, not patient, factors. In this paper, we employ two years of data from patients admitted to 21 Kaiser Permanente Northern California ICUs from the ED. We quantify the variation in ICU admission from the ED under varying degrees of ICU and ED occupancy. We find that substantial heterogeneity in admission rates is present, and that it cannot be explained either by patient factors or occupancy levels alone. We use a structural model to understand the extent that inter-temporal externalities could account for some of this variation. Using counterfactual simulations, we find that, if hospitals had more information regarding their behaviors, and if it were possible to alter hospital admission processes to incorporate such information, hospitals could achieve greater efficiency safely.

Keywords: Healthcare, Structural Estimation, Empirical Operations Management, Intensive Care Unit, Behavioral Operations

Suggested Citation

Shen, Yiwen and Chan, Carri and Zheng, Fanyin and Escobar, Gabriel J., Structural Estimation of Intertemporal Externalities on ICU Admission Decisions (March 31, 2020). Available at SSRN: https://ssrn.com/abstract=3564776 or http://dx.doi.org/10.2139/ssrn.3564776

Yiwen Shen (Contact Author)

Hong Kong University of Science & Technology (HKUST) - Department of Information Systems, Business Statistics and Operations Management ( email )

Clear Water Bay
Kowloon
Hong Kong

Carri Chan

Columbia University - Columbia Business School ( email )

3022 Broadway
New York, NY 10027
United States

Fanyin Zheng

Columbia University - Columbia Business School ( email )

3022 Broadway
New York, NY 10027
United States

HOME PAGE: http://www.fanyinzheng.com

Gabriel J. Escobar

Kaiser Permanente ( email )

CA
United States

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