This paper explores the link between utilization of ambulatory care and the likelihood of rehospitalization for an avoidable reason in veterans served by the Veteran Health Administration (VA). The analysis used administrative data containing healthcare utilization and patient characteristics stored at the national VA data warehouse, the Corporate Franchise Data Center. The study sample consisted of 284 veterans residing in Florida who had been hospitalized at least once for an avoidable reason. A bivariate probit model with instrumental variables was used to estimate the probability of rehospitalization. Veterans who had at least 1 ambulatory care visit per month experienced a significant reduction in the probability of rehospitalization for the same avoidable hospitalization condition. The findings suggest that ambulatory care can serve as an important substitute for more expensive hospitalization for the conditions characterized as avoidable.
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