Demand in New Zealand hospitals: expect the unexpected?

The health care sector in New Zealand has undergone substantial structural reform since 1983 and stands out relative to other OECD countries, with relatively low per capita health expenditure and a high share of public funding. Efficient allocation of resources in this public dominant health system is therefore paramount. This article uses a national database of hospital admissions to predict hospital demand. We find lagged information on patient demand imperative in formulating an easy to implement approach for predictive purposes. Contrasting predicted with actual demand, we construct an indicator of volatility in unexpected patient demand (at both the hospital and the disease chapter level) and assess its role with regard to patient outcomes. There is consistent evidence that when actual patient numbers exceed predicted, patients stay in hospital significantly longer and are more likely to have an acute readmission.