The impact of teaching status on average costs in Spanish hospitals

Abstract

In this paper, the observed systematic differences in costs for teaching hospitals (TH) in Spain are examined. Concern has been voiced regarding the existence of a bias in the financing of TH once prospective budgets are introduced for hospital finance. Claims for adjustment to take into account the 'legitimate' extra costs of teaching on hospital expenditure may be well grounded. Focus is on the estimation of the impact of teaching status on average cost, using a version of a multi-product hospital cost function, taking into account some relevant factors from which to derive the observed differences. It is assumed that the relationship between the explanatory and the dependent variables follows a flexible form for each of the explanatory variables. Also, the underlying covariance structure of the data is modelled. Two qualitatively different sources of variation are assumed: random effects and serial correlation. Random variation refers to both general level variation (through the random intercept) and the variation specifically related to teaching status. It is postulated that the impact of the random effects is dominant over the impact of the serial correlation effects. The model is estimated by restricted maximum likelihood. The results show that costs are 9% higher (15% in the case of median costs) in teaching than in non-teaching hospitals. That is, teaching status legitimately explains no more than half of the observed difference in actual costs. The impact on costs of the teaching factor depends on the number of residents, with an increase of 51.11% per resident for hospitals with fewer than 204 residents (third quartile of the number of residents) and 41.84% for hospitals with more than 204 residents. In addition, the estimated dispersion is higher among teaching hospitals. As a result, due to the considerable observed heterogeneity, results should be interpreted with caution. From a policy making point of view, it is concluded that since a higher relative burden for medical training falls on public hospitals, an explicit adjustment for the extra costs that the teaching factor imposes on hospital finance is needed, before hospital competition for inpatient services takes place.

The impact of teaching and research on hospital costs

“…In another publication, Sloan et al [18] concluded that the differential between nonphysician expenses in teaching versus nonteaching hospitals is at most 20 %. Similar studies have been conducted in other countries (e.g., [9] for Spain; [7,8] for Finland; [12] for Scotland; [10] for Canada). The differences between the "flagships" hospitals and the nonteaching hospitals were as high as 40 % for costs per stay, and 30% for costs per day, once adjusted for 37 covariates.…”

Cost Analysis of Hospitalization for COVID-19 in a Brazilian Public Teaching Hospital

“…These results are in line with the literature, which finds that the costs of teaching hospitals are higher than those that do not include this function. 19 , 20…”

Outsourcing day surgery to private for-profit hospitals: the price effects of competitive tendering

“…The cost of teaching in public hospitals is not fully known. However, a study from Spain found higher costs in teaching hospitals as compared with non-teaching hospitals (Lopez-Casasnovas and Saez, 1999). For the major specialties such as surgery, internal medicine, orthopaedics, gynaecology and obstetrics, it is mandatory in Norway to spend at least five years in the primary field, although one year may be replaced by an equivalent period in a complementary field in certain cases.…”