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The quest to reduce health care cost has led many industrialized nations to reduce hospital length of stay. This paper uses instrumental variable estimation to estimate the effect of early discharge on readmission rates of maternity patients in British Columbia, Canada and investigates how the impact varied according to hospitals' degree of specialization. Principal component analysis was used to classify the hospitals according to their degree of specialization. The results show that the early discharge policy increased readmission rates, and this increase, varied according to the degree of specialization of the hospital. The increase in readmission rate is observed to be lowest in the very highly specialized hospitals and highest in the moderately specialized hospitals. The highly specialized hospitals are, however, capable of using resources most efficiently at least partly due to a reduction in the use of invasive procedures.

Quality Effect of Early Discharge of Maternity Patients: Does Hospital Specialization Matter?