Hospital readmission rates: signal of failure or success?

Paolo Li Donni, Mauro Laudicella, Peter C. Smith

Research output: Contribution to journalArticlepeer-review

36 Citations (Scopus)

Abstract

Hospital readmission rates are increasingly used as signals of hospital performance and a basis for hospital reimbursement. However, their interpretation may be complicated by differential patient survival rates. If patient characteristics are not perfectly observable and hospitals differ in their mortality rates, then hospitals with low mortality rates are likely to have a larger share of un-observably sicker patients at risk of a readmission. Their performance on readmissions will then be underestimated. We examine hospitals’ performance relaxing the assumption of independence between mortality and readmissions implicitly adopted in many empirical applications. We use data from the Hospital Episode Statistics on emergency admissions for fractured hip in 290,000 patients aged 65 and over from 2003 to 2008 in England. We find evidence of sample selection bias that affects inference from traditional models. We use a bivariate sample selection model to allow for the selection process and the dichotomous nature of the outcome variables.
Original languageEnglish
Pages (from-to)909-921
Number of pages13
JournalJournal of Health Economics
Volume32(5)
Publication statusPublished - 2013

All Science Journal Classification (ASJC) codes

  • Health Policy
  • Public Health, Environmental and Occupational Health

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