Hospital Discharge: Model, Estimates, and Policy Analyses

65 Pages Posted: 27 Aug 2024

See all articles by Zhi Cao

Zhi Cao

The Chinese University of Hong Kong

Yan Chen

Hunan University of Technology and Business

Wei Yan

Peking University

Junjian Yi

Peking University

Hang Zou

Jinan University

Date Written: August 25, 2024

Abstract

One of the most important medical decisions is when to discharge a patient: it involves physicians and patients, entails information asymmetry, and occurs in dynamic contexts. Moreover, although the physician cares about the patient's interests, her preference regarding the trade-off between the patient's out-of-pocket expenses and health benefits may differ from the patient's. We develop and structurally estimate a model of discharge decisions that incorporates these features. The model allows us to distinguish between the impacts of a patient's financial incentive and a physician's altruistic and financial incentives on treatment and welfare outcomes. Also, it enables us to isolate the effect of preference inconsistency from the effects of the three incentives. We find that all three incentives raise healthcare expense, while preference inconsistency reduces it. Drawing from our structural estimates, we investigate policies aimed at managing overall expenses while enhancing patient and social welfare, without negatively impacting physician revenue.

Keywords: Discharge decisions, patient incentive, physician incentive, altruistic incentive, preference inconsistency

JEL Classification: H51, I11, I13, I18

Suggested Citation

Cao, Zhi and Chen, Yan and Yan, Wei and Yi, Junjian and Zou, Hang, Hospital Discharge: Model, Estimates, and Policy Analyses (August 25, 2024). Available at SSRN: https://ssrn.com/abstract=4936334 or http://dx.doi.org/10.2139/ssrn.4936334

Zhi Cao (Contact Author)

The Chinese University of Hong Kong ( email )

Yan Chen

Hunan University of Technology and Business ( email )

Wei Yan

Peking University ( email )

Junjian Yi

Peking University ( email )

National School of Development
Peking University
Beijing, Beijing 100871
China

HOME PAGE: http://https://en.nsd.pku.edu.cn/faculty/fulltime/y/520194.htm

Hang Zou

Jinan University ( email )

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