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Does Better Disease Management in Primary Care Reduce Hospital Costs?

  • Mark Dusheiko

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

  • Hugh Gravelle

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

  • Stephen Martin

    (Department of Economics, University of York, UK)

  • Nigel Rice

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

  • Peter C Smith

    (Imperial College Buisiness School, UK)

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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File URL: http://www.york.ac.uk/media/che/documents/papers/researchpapers/CHERP65_Disease_management_in_PC_reduce_hospital_costs.pdf
File Function: First version, 2011
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Paper provided by Centre for Health Economics, University of York in its series Working Papers with number 065cherp.

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Length: 33 pages
Date of creation: Aug 2011
Date of revision:
Handle: RePEc:chy:respap:65cherp
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  1. 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.
  2. Willard G. Manning & Anirban Basu & John Mullahy, 2003. "Generalized Modeling Approaches to Risk Adjustment of Skewed Outcomes Data," NBER Technical Working Papers 0293, National Bureau of Economic Research, Inc.
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  6. 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.
  7. 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.
  8. 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.
  9. Ellis, Randall P. & McGuire, Thomas G., 2007. "Predictability and predictiveness in health care spending," Journal of Health Economics, Elsevier, vol. 26(1), pages 25-48, January.
  10. 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.
  11. 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.
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