If physicians are unsure whether to discharge or admit emergency department patients, they can use “observation status” to perform additional assessments. For hospital patients, observation status may be indistinguishable from inpatient admission. Insurers like Medicare, however, charge observation patients a relatively higher share of hospital care costs and deny them coverage of post-acute care. This means observation patients that are never admitted can receive unexpected medical bills. In this paper, I study the implementation of state policies that require hospitals to notify patients of their observation status. I exploit staggered adoption in an event study framework to estimate the causal effect on the use, cost, and quality of observation care. I conclude that notice policies have little effect on observation status outcomes or decisions. Discharge patterns from observation are largely unchanged, and observation patients are no more likely to be admitted to the hospital after the information interventions. Though patients spend more time in observation as a result of the policy, there is no change in treatment intensity or financial liability. These findings suggest that low-touch, informational interventions provide insufficient protection against the risk of excessive out-of-pocket costs following observation.
Reliable nursing home staffing information is important for current and prospective residents because the number and type of nurses affect the quality of care. Historically, these data were collected semi-annually during routine safety inspections. To increase the frequency and validity of these data, the Centers for Medicare and Medicaid Services implemented a new reporting system that draws daily staffing levels from payroll and other auditable sources. During the transition, some nursing homes were exposed for having discrepancies between the self-reported and verifiable data. In this paper, I explore whether the reputational shock induced by this reporting system upgrade affects nursing homes’ subsequent staffing decisions and the quality of resident care. I create a novel measure of policy exposure, defined as the gap between a facility’s self-reported and verifiable staffing levels at the time of transition. I find that hours worked by direct care staff increased 25 percent more on average for nursing homes that faced high reputational exposure. These responses do not vary along facility or market dimensions or affect quality of care for long-stay residents.
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