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Does better disease management in primary care reduce hospital costs? Evidence from English primary care

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  • Mark Dusheiko
  • Hugh Gravelle
  • Stephen Martin
  • Nigel Rice
  • Peter Smith

Abstract

We apply cross-sectional and panel data methods to a database of 5 million patients in 8,000 English general practices to examine whether better primary care management of 10 chronic diseases is associated with reduced hospital costs. We find that only primary care performance in stroke care is associated with lower hospital costs. Our results suggest that the 10% improvement in the general practice quality of stroke care between 2004/5 and 2007/8 reduced 2007/8 hospital expenditure by about £130 million in England. The cost savings are due mainly to reductions in emergency admissions and outpatient visits, rather than to lower costs for patients treated in hospital or to reductions in elective admissions.

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Paper provided by Department of Economics, University of York in its series Discussion Papers with number 11/15.

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Handle: RePEc:yor:yorken:11/15

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Postal: Department of Economics and Related Studies, University of York, York, YO10 5DD, United Kingdom
Phone: (0)1904 323776
Fax: (0)1904 323759
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Web page: http://www.york.ac.uk/economics/
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Keywords: Quality. Disease management. Primary care. Hospital costs. Ambulatory care sensitive conditions. Preventative care.;

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References

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  1. Tim Doran, 2008. "Lessons from Early Experience with Pay for Performance," Disease Management and Health Outcomes, Springer Healthcare | Adis, vol. 16(2), pages 69-77.
  2. Kathleen J. Mullen & Richard G. Frank & Meredith B. Rosenthal, 2010. "Can you get what you pay for? Pay-for-performance and the quality of healthcare providers," RAND Journal of Economics, RAND Corporation, vol. 41(1), pages 64-91.
  3. G. Fiorentini & E. Iezzi & M. Lippi Bruni & C. Ugolini, 2009. "Incentives In Primary Care and Their Impact on Potentially Avoidable Hospital Admissions," Working Papers 660, Dipartimento Scienze Economiche, Universita' di Bologna.
  4. Anthony Scott & Stefanie Schurer & Paul H. Jensen & Peter Sivey, 2009. "The effects of an incentive program on quality of care in diabetes management," Health Economics, John Wiley & Sons, Ltd., vol. 18(9), pages 1091-1108.
  5. de Bruin, Simone R. & Heijink, Richard & Lemmens, Lidwien C. & Struijs, Jeroen N. & Baan, Caroline A., 2011. "Impact of disease management programs on healthcare expenditures for patients with diabetes, depression, heart failure or chronic obstructive pulmonary disease: A systematic review of the literature," Health Policy, Elsevier, vol. 101(2), pages 105-121, July.
  6. Buntin, Melinda Beeuwkes & Zaslavsky, Alan M., 2004. "Too much ado about two-part models and transformation?: Comparing methods of modeling Medicare expenditures," Journal of Health Economics, Elsevier, vol. 23(3), pages 525-542, May.
  7. Hugh Gravelle & Matt Sutton & Ada Ma, 2010. "Doctor Behaviour under a Pay for Performance Contract: Treating, Cheating and Case Finding?," Economic Journal, Royal Economic Society, vol. 120(542), pages F129-F156, 02.
  8. Lippi Bruni, Matteo & Nobilio, Lucia & Ugolini, Cristina, 2009. "Economic incentives in general practice: The impact of pay-for-participation and pay-for-compliance programs on diabetes care," Health Policy, Elsevier, vol. 90(2-3), pages 140-148, May.
  9. Manning, Willard G. & Basu, Anirban & Mullahy, John, 2005. "Generalized modeling approaches to risk adjustment of skewed outcomes data," Journal of Health Economics, Elsevier, vol. 24(3), pages 465-488, May.
  10. Paul Contoyannis & Andrew M. Jones & Nigel Rice, 2004. "The dynamics of health in the British Household Panel Survey," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 19(4), pages 473-503.
  11. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
  12. Blundell, Richard & Griffith, Rachel & van Reenen, John, 1999. "Market Share, Market Value and Innovation in a Panel of British Manufacturing Firms," Review of Economic Studies, Wiley Blackwell, vol. 66(3), pages 529-54, July.
  13. Richard Blundell & Rachel Griffith & Frank Windmeijer, 1999. "Individual effects and dynamics in count data models," IFS Working Papers W99/03, Institute for Fiscal Studies.
  14. Randall P. Ellis & Thomas G. McGuire, 2006. "Predictability and Predictiveness in Health Care Spending," Boston University - Department of Economics - Working Papers Series WP2006-001, Boston University - Department of Economics.
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Cited by:
  1. G. Fiorentini & M. Lippi Bruni & C. Ugolini, 2012. "GPs and hospital expenditures. Should we keep expenditure containment programs alive?," Working Papers wp829, Dipartimento Scienze Economiche, Universita' di Bologna.
  2. Iezzi, Elisa & Lippi Bruni, Matteo & Ugolini, Cristina, 2014. "The role of GP's compensation schemes in diabetes care: Evidence from panel data," Journal of Health Economics, Elsevier, vol. 34(C), pages 104-120.
  3. Jasmin Kantarevic & Boris Kralj, 2013. "Link Between Pay For Performance Incentives And Physician Payment Mechanisms: Evidence From The Diabetes Management Incentive In Ontario," Health Economics, John Wiley & Sons, Ltd., vol. 22(12), pages 1417-1439, December.
  4. Johar, Meliyanni, 2012. "Do doctors charge high income patients more?," Economics Letters, Elsevier, vol. 117(3), pages 596-599.

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