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Short-term fluctuations in hospital demand: implications for admission, discharge, and discriminatory behavior


  • We gratefully acknowledge valuable comments from Phil Haile (editor), Randy Bluffstone, David Dranove, Fabian Lange, Nivedita Mukherjee, Fiona Scott Morton, anonymous reviewers, and from seminar participants at the Oregon Health Research and Evaluation Collaborative, the Yale University Applied Microeconomics Workshop, the Econometric Society's 2007 North American Winter Meeting (Chicago), the Economics Department at Indiana University-Purdue University, Indianapolis, the Indianapolis VA Medical Center, and the Providence Health System, Portland, OR.


We analyze admission and discharge decisions when hospitals become capacity constrained on high-demand days, and develop a test for discrimination that, under certain circumstances, does not require controls for differences across patient groups. On high-demand days, patients are discharged earlier than expected compared to those discharged on low-demand days. High demand creates no statistically significant differences in hospitals' admission behavior. Thus, hospitals appear to ration capacity by hastening discharges rather than by restricting admissions. We could not reject a null hypothesis of no discrimination against Medicaid patients in discharges.

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