Truly inefficient or providing better quality of care? Analysing the relationship between riskadjusted hospital costs and patients’ health outcomes
AbstractAccounting for variation in the quality of care is a major challenge for the assessment of hospital cost performance. Because data on patients’ health improvement are generally not available, existing studies have resorted to inherently incomplete outcome measures such as mortality or re-admission rates. This opens up the possibility that providers of high quality care are falsely deemed inefficient and vice versa. This study makes use of a novel dataset of routinely collected patient-reported outcomes measures (PROMs) to i) assess the degree to which cost variation is associated with variation in patients’ health gain and ii) explore how far judgement about hospital cost performance changes when health outcomes are accounted for. We use multilevel modelling to address the clustering of patients in providers and isolate unexplained cost variation. Our results provide some evidence of a U-shaped relationship between risk-adjusted costs and outcomes for hip replacement surgery. For the other three investigated procedures, the estimated relationship is sensitive to the choice of PROM instrument. We do not observe substantial changes in estimates of cost performance when outcomes are explicitly accounted for.
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Bibliographic InfoPaper provided by Centre for Health Economics, University of York in its series Working Papers with number 068cherp.
Length: 23 pages
Date of creation: Oct 2011
Date of revision:
hospital costs; efficiency; patient outcomes; PROMs; cost-quality relationship;
Other versions of this item:
- Nils Gutacker & Chris Bojke & Silvio Daidone & Nancy J. Devlin & David Parkin & Andrew Street, 2013. "Truly Inefficient Or Providing Better Quality Of Care? Analysing The Relationship Between Risk‐Adjusted Hospital Costs And Patients' Health Outcomes," Health Economics, John Wiley & Sons, Ltd., vol. 22(8), pages 931-947, 08.
- NEP-ALL-2012-03-21 (All new papers)
- NEP-EFF-2012-03-21 (Efficiency & Productivity)
- NEP-HEA-2012-03-21 (Health Economics)
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