Closer outpatient care reduces hospitalisation rates in Hungary


Our study on the impact of opening new outpatient centres in Hungary shows a substitution effect between outpatient and inpatient care.

In  2010-2012  new  outpatient  service locations  were  established  in  poor  Hungarian  micro-regions.  We  exploited  this  quasi-experiment  to  estimate  the  extent  of  substitution  between outpatient and inpatient care in our article that was published in the European Journal of Health Economics.

Fixed-effects Poisson models on individual-level panel data for years 2008-2015 show that the number of outpatient visits increased by 19% and the number of  inpatient  stays  decreased  by 1.6%  as  a  result, driven by a  marked reduction of potentially avoidable hospitalization (PAH) (5%).

In our dynamic specification, PAH effects occur in the year  after  the  treatment,  whereas  non-PAH  only  decreases  with  a  multi-year  lag.  The instrumental   variable   estimates   suggest   that   a   one   euro   increase   in   outpatient   care expenditures  produces  a  0.6  euro  decrease  in  inpatient  care  expenditures. 

Our  results  (1) strengthen  the  claim  that  bringing  outpatient  care  closer  to  a  previously  underserved population   yields  considerable   health  benefits,   and   (2)   suggest   that  there   is   a  strong substitution element between outpatient and inpatient care.

This article was written as part of a wider health economics research project with the support of the National Research, Development and Innovation (K-120545) in collaboration with colleagues at ELTE and Corvinus University.