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Health care funding levels and patient outcomes: a national study


  • Margaret M. Byrne

    (Department of Epidemiology and Public Health, University of Miami, Miami, USA)

  • Kenneth Pietz
  • LeChauncy Woodard
  • Laura A. Petersen


Background: Health care funding levels differ significantly across geographic regions, but there is little correlation between regional funding levels and outcomes of elderly Medicare beneficiaries. Our goal was to determine whether this relationship holds true in a non-Medicare population cared for in a large integrated health care system with a capitated budget allocation system. Methods: We explored the association between health care funding and risk-adjusted mortality in the 22 Veterans Affairs (VA) geographic Networks over a six-year time period. Allocations to Networks were adjusted for illness burden using Diagnostic Cost Groups. To test the association between funding and risk-adjusted three-year mortality, we ran logistic regressions with single-year patient cohorts, as well as hierarchical regressions on a six year longitudinal data set, clustering on VA Network. Results: A $1000 increase in funding per unit of patient illness burden was associated with a 2-8% reduction in three-year mortality in cross sectional regressions. However, in longitudinal hierarchical regressions clustering on Network, the significant effect of funding level was eliminated. Conclusions: When longitudinal data are used, the significant cross sectional effect of funding levels on mortality disappear. Thus, the factors driving differences in mortality are Network effects, although part of the Network effect may be due to past levels of funding. Our results provide a caution for cross sectional examinations of the association between regional health care funding levels and health outcomes. Copyright © 2006 John Wiley & Sons, Ltd.

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  • Margaret M. Byrne & Kenneth Pietz & LeChauncy Woodard & Laura A. Petersen, 2007. "Health care funding levels and patient outcomes: a national study," Health Economics, John Wiley & Sons, Ltd., vol. 16(4), pages 385-393.
  • Handle: RePEc:wly:hlthec:v:16:y:2007:i:4:p:385-393 DOI: 10.1002/hec.1173

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    Cited by:

    1. Galina Besstremyannaya & Jaak Simm, 2014. "Multi-payer health insurance systems in Central and Eastern Europe: lessons from the Czech Republic, Slovakia, and Russia," Working Papers w0203, Center for Economic and Financial Research (CEFIR).
    2. Rosa Aísa & Jesús Clemente & Fernando Pueyo, 2014. "The influence of (public) health expenditure on longevity," International Journal of Public Health, Springer;Swiss School of Public Health (SSPH+), vol. 59(5), pages 867-875, October.
    3. Besstremyannaya, Galina, 2015. "Measuring the effect of health insurance companies on the quality of healthcare systems with kernel and parametric regressions," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 38(2), pages 3-20.
    4. Galina Besstremyannaya, 2014. "Urban inequity in the performance of social health insurance system: evidence from Russian regions," Working Papers w0204, Center for Economic and Financial Research (CEFIR).
    5. Grytten, Jostein & Carlsen, Fredrik & Skau, Irene, 2009. "Services production and patient satisfaction in primary care," Health Policy, Elsevier, vol. 89(3), pages 312-321, March.
    6. Galina Besstremyannaya, 2009. "Increased Public Financing and Health Care Outcomes in Russia," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 16(3), pages 723-734, October.

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