Cost inefficiency and hospital health outcomes

McKay, Niccie L.; Deily, Mary E.

doi:10.1002/hec.1299

Cited by 49 publications

(55 citation statements)

References 33 publications

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“…Eggleston and Shen (2011) find that the mortality rate for elderly heart attack patients is higher in for-profit hospitals, because they have more restrictive budget constraints. McKay and Deily (2008) also suggest that reductions in costs are associated with adverse consequences on health outcomes. In addition, not-for-profit hospitals enjoy tax exemptions.…”

Section: Discussionmentioning

confidence: 99%

Hospital treatment rates and spillover effects: Does ownership matter?

Baltagi

Yen

2014

Regional Science and Urban Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may

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Section: Discussionmentioning

confidence: 99%

Hospital treatment rates and spillover effects: Does ownership matter?

Baltagi

Yen

2014

Regional Science and Urban Economics

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“…Following the previous literature, we assume that a hospital chooses a set of inputs that will minimize the costs of production given a certain level of output [30]. The production process, described by a production function, converts inputs, such as medical and non-medical personnel, buildings, and equipment, into a given level of output, such as the number of discharges and outpatient visits.…”

Section: Conceptual Frameworkmentioning

confidence: 99%

“…Using SFA, several studies investigated the relationship between inefficiency and several measures of hospital outcomes [25]. Deily and McKay (2006) and McKay and Deily (2008) introduced an inefficiency term as a covariate to explain hospital health outcomes and found a positive relationship between cost-inefficiency and mortality rate in hospitals located in Florida, but not for the entire nation [29,30]. Deily, McKay, and Dorner (2000) found that high costinefficiency was strongly associated with a greater likelihood of non-government-owned hospital closure; while Frech and Mobley (2000) reported that cost-inefficiency was negatively correlated with future growth [31,32].…”

Section: Introductionmentioning

confidence: 99%

U.S. hospital efficiency and adoption of health information technology

Zhivan

Diana

2011

Health Care Manag Sci

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This study empirically examines the association between hospital inefficiency and the decision to introduce electronic medical records (EMR) and computerized physician order entry (CPOE) in a national sample of U.S. general hospitals in urban areas in 2006. The main research question is whether the presence of hospital cost inefficiency or other factors driving inefficiency in the production process of a hospital explain low adoption rates of health information technology (HIT) in a hospital setting. We estimated a logistic regression of HIT adoption as a function of hospital cost inefficiency scores obtained using a stochastic frontier analysis. The results demonstrate that hospitals with a greater degree of cost inefficiency were more likely to introduce EMR, suggesting that the benefits of EMR implementation in terms of improved efficiency were likely to outweigh the costs of adoption compared to hospitals that are more efficient. The results showed no association between cost inefficiency and the CPOE adoption decision.

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“…5,21 Fewer studies have examined the empirical relationship between costs and quality of care. [22][23][24][25][26][27][28] These studies shed light on whether higher costs are, on average, associated with better quality of care and whether hospitals' efforts to reduce costs may have adverse effects on quality. In each of these studies, the measures of quality and costs are averaged across patients within each hospital, which precludes consideration of the relationship between costs and quality for specific hospitals.…”

Section: The Correlation Between Outcomes and Costsmentioning

confidence: 99%

Variations in outcome and costs among NHS providers for common surgical procedures: econometric analyses of routinely collected data

Street

Gutacker

Bojke

et al. 2014

Health Services and Delivery Research

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BackgroundIt is important that NHS resources are used to their full extent, but efforts to reduce costs may have an adverse effect on patient outcomes. Our research is designed to provide a better understanding of the inter-relationship between costs and health outcomes among NHS providers (hospitals) for common surgical procedures.ObjectivesIn England, patient-reported outcomes measures (PROMs) are collected from patients undergoing one of four elective procedures: unilateral hip replacement, unilateral knee replacement, groin hernia repair and varicose vein surgery. We identify variation in patient-reported outcomes (PROs) across hospitals, assess the relationship between the cost and outcomes among NHS hospitals for these procedures, and determine the extent to which variations in outcomes and costs are due to differences in hospital performance.Data sourcesWe link Hospital Episode Statistics (HES) data with reference cost data and PROM data for patients having the four treatments between April 2009 and March 2010.MethodsThe first part of the empirical analysis focuses on variation in different dimensions of self-reported health status. We argue that each of the EuroQol-5D questionnaire (EQ-5D; European Quality of Life-5 Dimensions) dimensions should be assessed separately. Our graphical summary of the differential impact that hospitals have on PROs indicates the probability of reporting a given health outcome and shows how these probabilities vary across EQ–5D dimensions and hospitals. The second part of the empirical analysis focuses on the performance of hospitals and the inter-relationship between PROs and resource use.ResultsWe find that poorer post-treatment health status is associated with lower initial health status, higher weighted Charlson score, more diagnoses and lower socioeconomic status. We find significantly unexplained variation among hospitals in outcomes for patients undergoing hip replacement, knee replacement or varicose vein surgery, but not for hernia patients. For all four treatments we find significant unexplained variation in resource use among hospitals, whether measured by cost of treatment or length of stay. This suggests that hospitals can improve their utilisation of resources.LimitationsOur analyses are based on the HES. If data are missing from the medical record, or extracted and coded inaccurately, HES will contain errors. Hospitals should minimise these errors. Our study suffers from a large number of missing data, mainly because some hospitals were better than others at administering the baseline survey.ConclusionsThere is no general evidence that hospitals with lower resource use have worse health outcomes. There is a significant positive correlation for varicose veins, but this is sensitive to the choice of resource use and PRO measures. For hip and knee replacement the correlation is either insignificant or negative (depending on the resource use and PRO measures), implying that promoting health outcomes and controlling costs are not contradictory objectives. Indeed, we are able to identify hospitals with better than expected outcomes where resource use is below average. Future research should address how to handle missing data, evaluate hospital performance within the broader health economy, communicate PROMs to prospective patients, evaluate the impact of PROMs on patient choice and provider behaviour and evaluate PROMs for people with chronic conditions.FundingThe National Institute for Health Research Health Service and Delivery Research programme.

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Cost inefficiency and hospital health outcomes

Cited by 49 publications

References 33 publications

Hospital treatment rates and spillover effects: Does ownership matter?

Hospital treatment rates and spillover effects: Does ownership matter?

U.S. hospital efficiency and adoption of health information technology

Variations in outcome and costs among NHS providers for common surgical procedures: econometric analyses of routinely collected data

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