The Economic Consequences of Hospital Admissions

TLDR

The study examines the economic consequences of hospital admissions for adults. An event‑study design using Health and Retirement Study survey data and hospitalization records linked to credit reports was employed. Hospital admissions for non‑elderly adults raise out‑of‑pocket medical costs, unpaid bills, and bankruptcy, sharply cut earnings, income, credit access, and borrowing—especially for uninsured patients who face larger bill and bankruptcy spikes—yet admissions account for less than 5 % of all bankruptcies, and the earnings decline is substantial relative to the rise in out‑of‑pocket spending and is only modestly insured before Social Security eligibility.

Abstract

We use an event study approach to examine the economic consequences of hospital admissions for adults in two datasets: survey data from the Health and Retirement Study, and hospitalization data linked to credit reports. For non-elderly adults with health insurance, hospital admissions increase out-of-pocket medical spending, unpaid medical bills, and bankruptcy, and reduce earnings, income, access to credit, and consumer borrowing. The earnings decline is substantial compared to the out-of-pocket spending increase, and is minimally insured prior to age-eligibility for Social Security Retirement Income. Relative to the insured non-elderly, the uninsured non-elderly experience much larger increases in unpaid medical bills and bankruptcy rates following a hospital admission. Hospital admissions trigger fewer than 5 percent of all bankruptcies in our sample.