Working Paper: NBER ID: w14522
Authors: Douglas Almond; Joseph J. Doyle Jr.; Amanda E. Kowalski; Heidi Williams
Abstract: We estimate marginal returns to medical care for at-risk newborns by comparing health outcomes and medical treatment provision on either side of common risk classifications, most notably the "very low birth weight" threshold at 1500 grams. First, using data on the census of US births in available years from 1983-2002, we find evidence that newborns with birth weights just below 1500 grams have lower one-year mortality rates than do newborns with birth weights just above this cutoff, even though mortality risk tends to decrease with birth weight. One-year mortality falls by approximately one percentage point as birth weight crosses 1500 grams from above, which is large relative to mean one-year mortality of 5.5% just above 1500 grams. Second, using hospital discharge records for births in five states in available years from 1991-2006, we find evidence that newborns with birth weights just below 1500 grams have discontinuously higher costs and frequencies of specific medical inputs. We estimate a $4,000 increase in hospital costs as birth weight approaches 1500 grams from above, relative to mean hospital costs of $40,000 just above 1500 grams. Taken together, these estimates suggest that the cost of saving a statistical life of a newborn with birth weight near 1500 grams is on the order of $550,000 in 2006 dollars.
Keywords: Medical care; At-risk newborns; Marginal returns
JEL Codes: I12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Newborns with birth weights just below 1500 grams (J13) | One-year mortality rates (J17) |
| Newborns just below the 1500-gram threshold (J13) | Hospital costs (I11) |
| Birth weight at the threshold of 1500 grams (I38) | Likelihood of receiving additional medical treatment (I12) |
| Newborns near the threshold (J13) | Cost per statistical life saved (J17) |