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A multilevel modelling approach to analysis of patient costs under managed care

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  • Kathleen Carey
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    Abstract

    The growth of the managed care model of health care delivery in the USA has led to broadened interest in the performance of health care providers. This paper uses multilevel modelling to analyse the effects of managed care penetration on patient level costs for a sample of 24 medical centres operated by the Veterans Health Administration (VHA). The appropriateness of a two level approach to this problem over ordinary least squares (OLS) is demonstrated. Results indicate a modicum of difference in institutions' performance after controlling for patient effects. Facilities more heavily penetrated by the managed care model may be more effective at controlling costs of their sicker patients. Copyright © 2000 John Wiley & Sons, Ltd.

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    Bibliographic Info

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

    Volume (Year): 9 (2000)
    Issue (Month): 5 ()
    Pages: 435-446

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    Handle: RePEc:wly:hlthec:v:9:y:2000:i:5:p:435-446

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

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    References

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    1. Nigel Rice & Andrew Jones, 1997. "Multilevel models and health economics," Health Economics, John Wiley & Sons, Ltd., vol. 6(6), pages 561-575.
    2. Jones, Andrew M., 2000. "Health econometrics," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 6, pages 265-344 Elsevier.
    3. Dor, Avi, 1994. "Non-minimum cost functions and the stochastic frontier: On applications to health care providers," Journal of Health Economics, Elsevier, vol. 13(3), pages 329-334, October.
    4. Zuckerman, Stephen & Hadley, Jack & Iezzoni, Lisa, 1994. "Measuring hospital efficiency with frontier cost functions," Journal of Health Economics, Elsevier, vol. 13(3), pages 255-280, October.
    5. Richard Blundell & Frank Windmeijer, 1997. "Cluster effects and simultaneity in multilevel models," Health Economics, John Wiley & Sons, Ltd., vol. 6(4), pages 439-443.
    6. Burgess Jr., James F. & Christiansen, Cindy L. & Michalak, Sarah E. & Morris, Carl N., 2000. "Medical profiling: improving standards and risk adjustments using hierarchical models," Journal of Health Economics, Elsevier, vol. 19(3), pages 291-309, May.
    7. Newhouse, Joseph P., 1994. "Frontier estimation: How useful a tool for health economics?," Journal of Health Economics, Elsevier, vol. 13(3), pages 317-322, October.
    8. Miika Linna, 1998. "Measuring hospital cost efficiency with panel data models," Health Economics, John Wiley & Sons, Ltd., vol. 7(5), pages 415-427.
    9. Vitaliano, Donald F. & Toren, Mark, 1994. "Cost and efficiency in nursing homes: a stochastic frontier approach," Journal of Health Economics, Elsevier, vol. 13(3), pages 281-300, October.
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    Cited by:
    1. Tiemann, Oliver & Schreyögg, Jonas, 2011. "Changes in hospital efficiency after privatization," hche Research Papers 2011/02, Hamburg Center for Health Economics (hche), University of Hamburg.
    2. Rabe-Hesketh, Sophia & Skrondal, Anders & Pickles, Andrew, 2005. "Maximum likelihood estimation of limited and discrete dependent variable models with nested random effects," Journal of Econometrics, Elsevier, vol. 128(2), pages 301-323, October.
    3. Bache, Stefan Holst Milton & Kristensen, Troels, 2013. "A simple but efficient approach to the analysis of multilevel data," COHERE Working Paper 2013:6, COHERE - Centre of Health Economics Research, University of Southern Denmark.
    4. Or, Zeynep & Wang, Jia & Jamison, Dean, 2005. "International differences in the impact of doctors on health: a multilevel analysis of OECD countries," Journal of Health Economics, Elsevier, vol. 24(3), pages 531-560, May.
    5. Antonio Clavero Barranquero & Mª. Luz González Alvarez, 2005. "A survey of econometric models to analyze the demand and utilisation of health care," Hacienda Pública Española, IEF, vol. 173(2), pages 129-162, June.

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