Date of Award
Spring 2024
Document Type
Dissertation
Degree Name
Doctor of Philosophy (PhD)
Department
Economics
First Advisor
Berry, Steven
Abstract
In this dissertation, we explore the effects of capacity constraints on various outcomes ofservice users (referred to as “patients”) in healthcare industries. In Chapter 1, we investigate the effect of facility congestion on the care outcomes and welfare of patients in the Japanese long-term care industry. In Chapter 2, we study the effect of congestion on the admission decisions of the Japanese nursing facilities. Together, Chapters 1 and 2 provide useful insights on the effect of congestion on the quantity and quality aspects of service production, in a market with regulated prices. In Chapter 3, we examine the effect of providing publicly insured patients with better access to health care at private facilities, in the context of the US veterans. Chapter 1 in particular concerns with how the negative consequences of congestion can potentially offset the benefit of receiving services at high-quality service providers. Directing consumers to higher-quality service providers has been considered an effective policy to improve service outcomes and consumer welfare in various contexts. However, higher-quality providers may tend to be more congested, and congestion may be detrimental to outcomes and welfare. We study this congestion-quality tradeoff and discuss its policy implications in the context of Japanese nursing homes. We find evidence that (1) within nursing homes, higher occupancy leads to poorer care outcomes but (2) between nursing homes, occupancy and outcome-based quality measures are positively correlated. To evaluate the welfare impact of patient reallocation policy, we then develop and estimate a model of demand for nursing home care where choice set is potentially constrained in an unobserved manner by providers’ rationing behavior. We find that nursing homes are less likely to admit patients at higher occupancy but no evidence that patients dislike congestion. Simulation of a reallocation policy suggests a potential gain from occupancy smoothing even though the policy sends patients to lower-quality care providers on average. In Chapter 2, we study the effect of capacity utilization on healthcare provision, byinvestigating the effect of nursing facilities’ daily occupancy on their admission and discharge decisions. While some researchers and policymakers raise concerns that excess capacity leads to wasteful care provision by induced demand and argue for restricting capacity, such a restriction may prevent valuable care provision if providers operate under supply constraints. To find out the relative importance of providers’ demand inducement and capacity constraint, we develop a theoretical framework which generates implications to evaluate the relative importance of the two mechanisms. The test requires the causal effect of occupancy variation on admissions and discharges, which we obtain by using patient deaths as an exogenous occupancy shifter. We find that an occupancy reduction leads to increased admissions, and the response is larger at higher baseline occupancy, which is consistent with the supply constraint being relatively more important. In Chapter 3, we study the effect of complementing public health care with private care. Leveraging a policy at the Veterans Health Administration that generates discontinuity in private care access, we find that expanding coverage to private care increases private outpatient care by $53 (SE: 5) and decreases VA outpatient care by $20 (SE: 7), with no impact on inpatient care. The policy led to a marginally significant 0.1 p.p. (2.8%, SE: 0.04) decrease in one-year mortality, possibly because of decreased wait times and increased access to certain specialty care. Given our estimates, the benefit of access expansion significantly outweighs the increased costs.
Recommended Citation
Saruya, Hiroki, "Essays on Capacity Constraints in Healthcare Industries" (2024). Yale Graduate School of Arts and Sciences Dissertations. 1255.
https://elischolar.library.yale.edu/gsas_dissertations/1255
