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Cross-country comparisons of costs: the use of episode-specific transitive purchasing power parities with standardised cost categories

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Author Info

  • Jonas Schreyögg
  • Oliver Tiemann

    (Department of Health Care Management, Berlin University of Technology, Berlin, Germany)

  • Tom Stargardt

    (Department of Health Care Management, Berlin University of Technology, Berlin, Germany)

  • Reinhard Busse

    (Department of Health Care Management, Berlin University of Technology, Berlin, Germany)

Abstract

International comparisons of healthcare costs are growing in importance for a number of different applications. The use of common approaches to converting costs such as GDP purchasing power parities (PPPs) often does not reflect price differences in healthcare in an appropriate manner. This means that new approaches need to be explored. The objective of this paper is to demonstrate the feasibility of using episode-specific PPPs (ESPPPs) to facilitate cross-country comparisons of healthcare costs and to compare this approach with other common approaches to conversion. Costs for five care episodes from hospitals in eight European countries were obtained from the EU HealthBASKET project. ESPPPs were created by using Fisher-type PPPs in combination with the Eltetö-Köves-Szulc method at the episode level. Differences in ESPPPs among the five care episodes were discussed and compared with other common conversion approaches. We found that ESPPPs-reflected prices and resource use more accurately than conventional conversion approaches such as GDP PPPs and medical care PPPs. This was particularly evident for labour-intensive care episodes in which other conversion approaches revealed problems in the way that labour input had not been considered appropriately. The results demonstrate that ESPPPs are preferable to other common conversion approaches when international healthcare cost comparisons are performed. Copyright © 2008 John Wiley & Sons, Ltd.

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Bibliographic Info

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

Volume (Year): 17 (2008)
Issue (Month): S1 ()
Pages: S95-S103

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Handle: RePEc:wly:hlthec:v:17:y:2008:i:s1:p:s95-s103

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

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  1. Linna, Miika & Hakkinen, Unto & Magnussen, Jon, 2006. "Comparing hospital cost efficiency between Norway and Finland," Health Policy, Elsevier, vol. 77(3), pages 268-278, August.
  2. David Epstein & Anne Mason & Andrea Manca, 2008. "The hospital costs of care for stroke in nine European countries," Health Economics, John Wiley & Sons, Ltd., vol. 17(S1), pages S21-S31.
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  4. Martine M. Bellanger & Zeynep Or, 2008. "What can we learn from a cross-country comparison of the costs of child delivery?," Health Economics, John Wiley & Sons, Ltd., vol. 17(S1), pages S47-S57.
  5. Jonas Schreyögg, 2008. "A micro-costing approach to estimating hospital costs for appendectomy in a Cross-European context," Health Economics, John Wiley & Sons, Ltd., vol. 17(S1), pages S59-S69.
  6. Oliver Tiemann, 2008. "Variations in hospitalisation costs for acute myocardial infarction - a comparison across Europe," Health Economics, John Wiley & Sons, Ltd., vol. 17(S1), pages S33-S45.
  7. Reinhard Busse & Jonas Schreyögg & Peter C. Smith, 2008. "Variability in healthcare treatment costs amongst nine EU countries - results from the Health BASKET project," Health Economics, John Wiley & Sons, Ltd., vol. 17(S1), pages S1-S8.
  8. Tom Stargardt, 2008. "Health service costs in Europe: cost and reimbursement of primary hip replacement in nine countries," Health Economics, John Wiley & Sons, Ltd., vol. 17(S1), pages S9-S20.
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  12. Sarah Wordsworth & Anne Ludbrook, 2005. "Comparing costing results in across country economic evaluations: the use of technology specific purchasing power parities," Health Economics, John Wiley & Sons, Ltd., vol. 14(1), pages 93-99.
  13. Jonas Schreyögg & Tom Stargardt & Oliver Tiemann & Reinhard Busse, 2006. "Methods to determine reimbursement rates for diagnosis related groups (DRG): A comparison of nine European countries," Health Care Management Science, Springer, vol. 9(3), pages 215-223, August.
  14. Richard Grieve & Richard Nixon & Simon G. Thompson & Charles Normand, 2005. "Using multilevel models for assessing the variability of multinational resource use and cost data," Health Economics, John Wiley & Sons, Ltd., vol. 14(2), pages 185-196.
  15. Drechsler, Laszlo, 1973. "Weighting of Index Numbers in Multilateral International Comparisons," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 19(1), pages 17-34, March.
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  17. C. Daniel Mullins & Mirko Sikirica & Viran Seneviratne & Jeonghoon Ahn & Kasem S. Akhras, 2004. "Comparisons of Hypertension-Related Costs from Multinational Clinical Studies," PharmacoEconomics, Springer Healthcare | Adis, vol. 22(15), pages 1001-1014.
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Cited by:
  1. Reinhard Busse & Jonas Schreyögg & Peter C. Smith, 2008. "Variability in healthcare treatment costs amongst nine EU countries - results from the Health BASKET project," Health Economics, John Wiley & Sons, Ltd., vol. 17(S1), pages S1-S8.
  2. David Epstein & Anne Mason & Andrea Manca, 2008. "The hospital costs of care for stroke in nine European countries," Health Economics, John Wiley & Sons, Ltd., vol. 17(S1), pages S21-S31.
  3. Martine M. Bellanger & Zeynep Or, 2008. "What can we learn from a cross-country comparison of the costs of child delivery?," Health Economics, John Wiley & Sons, Ltd., vol. 17(S1), pages S47-S57.
  4. Rice, N & Robone, S & Smith, P.C, 2008. "International Comparison of Public Sector Performance: The Use of Anchoring Vignettes to adjust Self-Reported Data," Health, Econometrics and Data Group (HEDG) Working Papers 08/28, HEDG, c/o Department of Economics, University of York.

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