DaCHE discussion papers,
University of Southern Denmark, Dache - Danish Centre for Health Economics

Abstract: Many high-income countries have successfully reduced hospital mortality in several acute health conditions. We test the hypothesis that variation in the supply of care directed to saving the life of individuals with a health shock may result in increasing the demand for health care as individuals are likely to contribute to the demand after surviving the health shock. We examined repeated cross-sections of individuals exposed to an AMI or a stroke over a time window of ten years in Denmark. Hospital survival probabilities in the interval 0- 30 days from the shock are used as an indicator of the supply, while individual health care expenditure in the interval 31-365 days is used as an indicator of the demand. We find the demand is highly elastic to supply-driven variation in time to death. Results are robust to a placebo test on individuals exposed to the shock without entering time to death.

Keywords: Health care demand; Hospital quality of care; Time to death

JEL-codes: I10

25 pages, October 28, 2021

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