Hospitals face a trade-off between how many non-emergency patients they admit each period ('crowding') and how long these patients must wait for an appointment ('waiting'). This paper evaluates whether there is too much crowding at public hospitals in England. I first exploit pseudo-random variation in emergency admissions to estimate the short-run effect of admissions on quality of care. I find that crowding has large adverse effects on patients, causing the rate of unplanned readmission to vary by up to 20%. The most plausible mechanism behind this effect is that physicians discharge patients early due to binding bed constraints. I then conduct a marginal welfare analysis that compares the impact of non-emergency admissions on quality of care (a crowding effect) with the impact on access to care (a waiting effect). This shows that policies which reduce non-emergency admissions, thereby decreasing crowding but increasing waiting times, may lead to substantial net welfare gains.
Thomas Hoe is a PhD Candidate in Economics at University College London and a Visiting Scholar at the Institute for Fiscal Studies. His research focuses on healthcare and public economics, and makes use of large administrative datasets. In recent work he has studied crowding in public hospitals, how emergency departments respond to pressures to reduce waiting times, and how hospitals may reduce emergency readmissions. Thomas’ past experience includes working as an economist in the public and private sector on policy issues in antitrust, healthcare, and financial services.