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Health care funding levels and patient outcomes: a national study

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  • Margaret M. Byrne

    (Department of Epidemiology and Public Health, University of Miami, Miami, USA)

  • Kenneth Pietz
  • LeChauncy Woodard
  • Laura A. Petersen
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    Abstract

    Background: Health care funding levels differ significantly across geographic regions, but there is little correlation between regional funding levels and outcomes of elderly Medicare beneficiaries. Our goal was to determine whether this relationship holds true in a non-Medicare population cared for in a large integrated health care system with a capitated budget allocation system. Methods: We explored the association between health care funding and risk-adjusted mortality in the 22 Veterans Affairs (VA) geographic Networks over a six-year time period. Allocations to Networks were adjusted for illness burden using Diagnostic Cost Groups. To test the association between funding and risk-adjusted three-year mortality, we ran logistic regressions with single-year patient cohorts, as well as hierarchical regressions on a six year longitudinal data set, clustering on VA Network. Results: A $1000 increase in funding per unit of patient illness burden was associated with a 2-8% reduction in three-year mortality in cross sectional regressions. However, in longitudinal hierarchical regressions clustering on Network, the significant effect of funding level was eliminated. Conclusions: When longitudinal data are used, the significant cross sectional effect of funding levels on mortality disappear. Thus, the factors driving differences in mortality are Network effects, although part of the Network effect may be due to past levels of funding. Our results provide a caution for cross sectional examinations of the association between regional health care funding levels and health outcomes. Copyright © 2006 John Wiley & Sons, Ltd.

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    File URL: http://hdl.handle.net/10.1002/hec.1173
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    Bibliographic Info

    Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

    Volume (Year): 16 (2007)
    Issue (Month): 4 ()
    Pages: 385-393

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    Handle: RePEc:wly:hlthec:v:16:y:2007:i:4:p:385-393

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    Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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    Cited by:
    1. Galina Besstremyannaya, 2009. "Increased Public Financing and Health Care Outcomes in Russia," Transition Studies Review, Springer, vol. 16(3), pages 723-734, October.
    2. Galina Besstremyannaya, 2014. "Urban inequity in the performance of social health insurance system: evidence from Russian regions," Working Papers w0204, Center for Economic and Financial Research (CEFIR).
    3. Grytten, Jostein & Carlsen, Fredrik & Skau, Irene, 2009. "Services production and patient satisfaction in primary care," Health Policy, Elsevier, vol. 89(3), pages 312-321, March.
    4. Fredrik Carlsen & Jostein Grytten & Irene Skau, 2007. "Service Production and Patient Satisfaction in Primary Care," Working Paper Series 9107, Department of Economics, Norwegian University of Science and Technology.
    5. Galina Besstremyannaya & Jaak Simm, 2014. "Multi-payer health insurance systems in Central and Eastern Europe: lessons from the Czech Republic, Slovakia, and Russia," Working Papers w0203, Center for Economic and Financial Research (CEFIR).

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