Does the opening of an emergency department influence hospital admissions? Evidence from French private hospitals

Although operating an emergency department (ED) can influence general admission activity of hospitals, most articles that analyze hospital care ignore the potential spillover of emergency activity. In this paper, we examine the consequences of a French reform that encouraged the creation of EDs within private-for-profit (PFP) hospitals in order to decrease congestion in EDs. We use administrative panel data on 365 French PFP hospitals observed between 2002 and 2012. Specifications including hospital fixed-effects are estimated to examine the impact of an ED opening on private hospitals' admission activity, namely inpatient and day-care admissions (ED visits are excluded, but patients admitted following an ED visit are included). We control for shocks that can impact demand for care in hospitals, and we estimate yearly changes before and after the opening. We find that an ED opening is followed by an increase in the number and proportion of inpatient admissions, and by an increase in the length of inpatient stays. A transitory increase in the bed occupancy rate is also observed. In many countries, public and private hospitals compete to some extent. The former provide a public service, while the latter are profit-maximizers that are allowed to specialize in profitable activities. They generally focus on day-care admissions. We provide empirical evidence that private hospitals experience a significant change in the composition of their admissions when they start providing emergency care. Opening an ED creates a new non-selective entryway to private hospitals, resulting in admissions of inpatients with health problems that are more severe. Hence, involving PFP hospitals in the provision of emergency care is likely to make the structure of admissions of private hospitals closer to that of public hospitals.