Use of Claims Data to Examine the Impact of Length of Inpatient Psychiatric Stay on Readmission Rate

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Abstract
This study analyzed the impact of length of stay for inpatient treatment of psychiatric disorders on readmission rates. Hospitalization data were obtained from the MarketScan data set collected by Medstat. The instrumental variable method, an econometric technique, was used to estimate the impact of length of stay on the rate of readmission for 5,735 persons who had at least one discharge with a primary diagnosis of a psychiatric disorder during 1997 and 1998. Decreasing length of stay below ten days led to an increase in the readmission rate during the 30 days after discharge. Decreasing the length of stay from seven to six days increased the expected readmission rate from.04 to.047 (17.5 percent), whereas decreasing length of stay from four to three days increased the readmission rate from.09 to.136 (51.1 percent). Decreasing length of stay for inpatient psychiatric treatment increased the readmission rate. The use of instrumental variables could help better estimate the value of mental health services when using observational data.