Does an Overcrowded Emergency Department Reduce Moral Hazard? Lessons from Emergency Department Visits to Three Hospitals in an Israeli Metropolitan Area

Metropolitan Haifa, Israel, has three hospitals: Rambam Health Care Campus, Bnai Zion Medical Center, and Carmel Medical Center. In 2007–2014, the length of stay at RHCC’s emergency department increased, while the number of visits decreased. We ask whether the increase in LOS is associated with the falling numbers of visits to other EDs, whether an increase in LOS induces more referrals to competing hospitals in the metropolitan area, and whether it pays to be a crowded ED in mitigating moral hazard. Average LOS at Rambam climbed from 3.5 h in 2000–2007 to 6.4 in 2008–2018. While the number of visits to Rambam decreased significantly, those to Bnai Zion increased significantly and quite linearly. A one-way ANOVA test reveals a statistically significant difference among the three hospitals. In addition, Rambam was significantly different from Carmel but not from Bnai Zion. When LOS stabilized at Rambam from 2016 to 2018 and increased at Bnai Zion, referrals to Rambam went up again. Policymakers should instruct all hospitals to publish LOS data, regulate referrals to EDs, and find an optimal LOS that will reduce competition, non-urgent visits, and moral hazard.