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Modelling demand and supply influences on utilization: A flow demand model to predict hospital utilization at the small area level

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Author Info
Mónica D. Oliveira

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Abstract

This study outlines a model to predict hospital utilization at the small area level within a National Health Service (NHS) institutional context. The proposed approach departs from alternative analyses based on utilization flows of hospital care between a local population and a hospital. A flow demand model is outlined that relates flow demand to utilization flows; models the interaction between hospital supply and utilization of alternative hospitals; captures the process of demand for hospital care, with special attention given to the role of other health care sectors, to the organizational and institutional context of the hospital system and to geographic variations. The flow approach partly overcomes the problem of dealing with simultaneity of determination between supply and demand. A two-part econometric model suitable to estimate the flow demand model for prediction purposes is tested and applied to the Portuguese health care system. The results show the model to be robust and to provide key information for defining future hospital policies at the central level.

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Publisher Info
Article provided by Taylor and Francis Journals in its journal Applied Economics.

Volume (Year): 36 (2004)
Issue (Month): 20 (November)
Pages: 2237-2251
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Handle: RePEc:taf:applec:v:36:y:2004:i:20:p:2237-2251

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  1. Willard G. Manning Jr. & Charles E. Phelps, 1979. "The Demand for Dental Care," Bell Journal of Economics, The RAND Corporation, vol. 10(2), pages 503-525, Autumn. [Downloadable!] (restricted)
  2. Duan, Naihua, et al, 1983. "A Comparison of Alternative Models for the Demand for Medical Care," Journal of Business & Economic Statistics, American Statistical Association, vol. 1(2), pages 115-26, April.
  3. Hugh Gravelle & Matthew Sutton & Stephen Morris & Frank Windmeijer & Alastair Leyland & Chris Dibben & Mike Muirhead, 2003. "Modelling supply and demand influences on the use of health care: implications for deriving a needs-based capitation formula," Health Economics, John Wiley & Sons, Ltd., vol. 12(12), pages 985-1004. [Downloadable!]
  4. Leung, S.F. & Yu, S., 1992. "On the Choice Between Sample Selection and Two-Part Models," RCER Working Papers 337, University of Rochester - Center for Economic Research (RCER).
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  5. Roy Carr-Hill & Geoffrey Hardman & Stephen Martin & Stuart Peacock & Trevor Sheldon & Peter Smith, 1994. "A formula for distributing NHS revenues based on small area use of hospital beds," Working Papers 022cheop, Centre for Health Economics, University of York. [Downloadable!]
  6. Oliveira, Monica Duarte & Bevan, Gwyn, 2003. "Measuring geographic inequities in the Portuguese health care system: an estimation of hospital care needs," Health Policy, Elsevier, vol. 66(3), pages 277-293, December. [Downloadable!] (restricted)
  7. Manning, Willard G. & Mullahy, John, 2001. "Estimating log models: to transform or not to transform?," Journal of Health Economics, Elsevier, vol. 20(4), pages 461-494, July. [Downloadable!] (restricted)
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  8. Nigel Rice & Peter Smith, 1999. "Approaches to capitation and risk adjustment in health care: an international survey," Working Papers 038cheop, Centre for Health Economics, University of York. [Downloadable!]
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