Returns to Medical Care Among High Risk Infants

A really interesting NBER paper this week looks at health returns to medical interventions among high-risk (here, low birth weight) newborns babies. The difficulty in assessing the casual effects of medical care in this population is that worse-off infants may get more of it because they require it. On the other hand, unhealthy babies may be more likely to come from poor families, who lack access to health care. Either process makes it difficult to recover causal effects.

Douglas Almond, Joseph Doyle, Amanda E. Kowalski and Heidi Williams adopt an interesting strategy to get around this issue. Essentially, they utilize existing birth weight thresholds (those below 1500 grams are classified very low birth weight) and provider obedience to these discontinuous (and perhaps arbitrary?) thresholds. By comparing those babies just below 1500 grams to those just above it, the authors contend that they get around the targetting of medical care to worse off babies - after all, the difference of a few grams around the cutoff is likely random and unrelated to innate biological hardiness. In a sense, the level of treatment given is essentially random for babies born around this narrow threshold. More on their methodology (which Almond and Doyle employ in another very interesting paper) and results:

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.

Aside from the policy relevance of the results and the innovative research design used in the study, I find it really interesting that the provision of health care is so sensitive to seemingly arbitrary guidelines. Does anyone have a sense of where the 1500 and 2500 gram cutoffs came from, and whether they've outlived their clinical relevance?