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What explains variation in the costs of treating patients in English obstetrics specialties?

Author

Listed:
  • Mauro Laudicella

    (Centre for Health Economics, University of York, UK)

  • Kim Rosen Olsen

    (Institute for Public Health, University of Southern Denmark and Danish Institute for Health Services Research, 27-29 Dampfaergevej, DK 2100, Copenhagen, Denmark)

  • Andrew Street

    (Centre for Health Economics, University of York, UK)

Abstract

We assess patients admitted to English obstetrics departments to identify what proportion of variation in their costs is explained by patient characteristics and what proportion is due to departmental characteristics. Hospital Episode Statistics records for every patient admitted to obstetrics departments are matched to Reference Cost data by HRG reported by all English hospitals for the year 2005/6. Our sample consists of 951,277 patients in 136 departments. We estimate fixed effects models analysing patient-level costs, explore departmental characteristics that drive variation in costs at department-level and explore the sensitivity of results to the use of the full sample and sub-samples of obstetrics patients. Patient costs depend on various diagnostic characteristics over and above the HRG classification, particularly whether the patient suffered infection. After controlling for patient characteristics a substantial amount of unexplained variation in costs remains at departmental level. Higher costs are evident in departments that are not supported by a neonatology specialty and where factor prices are higher. There is evidence of lower costs in departments with high volumes of activity. We identify departments where further scrutiny of their high costs is required.

Suggested Citation

  • Mauro Laudicella & Kim Rosen Olsen & Andrew Street, 2009. "What explains variation in the costs of treating patients in English obstetrics specialties?," Working Papers 049cherp, Centre for Health Economics, University of York.
  • Handle: RePEc:chy:respap:49cherp
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    Cited by:

    1. Katharina Hauck & Xueyan Zhao & Terri Jackson, 2010. "Adverse events in surgical inpatients: A comparative analysis of public hospitals in Victoria," Monash Econometrics and Business Statistics Working Papers 5/10, Monash University, Department of Econometrics and Business Statistics.
    2. Marie Kruse & Jan Christensen, 2013. "Is quality costly? Patient and hospital cost drivers in vascular surgery," Health Economics Review, Springer, vol. 3(1), pages 1-13, December.
    3. Gravelle, Hugh & Sivey, Peter, 2010. "Imperfect information in a quality-competitive hospital market," Journal of Health Economics, Elsevier, vol. 29(4), pages 524-535, July.
    4. Hauck, Katharina & Zhao, Xueyan & Jackson, Terri, 2012. "Adverse event rates as measures of hospital performance," Health Policy, Elsevier, vol. 104(2), pages 146-154.

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