The Marginal Value of a Diagnosis: Evidence from Gestational Diabetes

Abstract

Questions about whether the benefits of additional medical spending exceed their costs have long been studied in the health economics literature, but the marginal returns to care during pregnancy have received little attention. I study gestational diabetes mellitus (GDM), an increasingly common pregnancy complication, and estimate the marginal returns to diagnosis. I use a regression discontinuity design and compare patients just above and just below the diagnostic threshold. Using MarketScan claims and laboratory data, I find that diagnosis at the margin increases a woman’s out-of-pocket spending on diabetes and nutrition services by approximately $28 per additional diagnosis, while producing no detectable increase in total pregnancy spending. For this modest increase in spending on these services, crossing the threshold yields substantial infant health benefits: women diagnosed at the margin have 1.36 percentage points lower rates of infant macrosomia and 1.33 percentage points lower rates of NICU admission. Relative to the rates just below the cutoff, these declines are roughly 60 and 55 percent.