IDEAS home Printed from https://ideas.repec.org/p/chy/respap/78cherp.html
   My bibliography  Save this paper

English Hospitals Can Improve Their Use of Resources: An Analysis of Costs and Length of Stay for Ten Treatments

Author

Listed:
  • James Gaughan

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

  • Anne Mason

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

  • Andrew Street

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

  • Padraic Ward

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

Abstract

Objectives: We investigate variations in costs and length of stay (LoS) among hospitals for ten clinical treatments to assess: 1. The extent to which resource use is driven by the characteristics of patients and of the type and quality of care they receive; 2. After taking these characteristics into account, the extent to which resource use is related to the hospital in which treatment takes place; 3. If conclusions are robust to whether resource use is described by costs or by LoS. Data: We analysed patient-level data from the Hospital Episode Statistics (HES) data for 2007/8, which contains approximately 16.5 million inpatient records. This dataset was merged with costs derived from the Reference Cost database. We extracted data on three medical ‘conditions’ (acute myocardial infarction (AMI); childbirth; stroke) and seven surgical treatments (appendectomy; breast cancer (mastectomy); coronary artery bypass graft (CABG); cholecystectomy; inguinal hernia; hip replacement; and knee replacement). Methods: For each treatment, we used a two-stage approach to investigate variations in cost and LoS. In stage I, we ran fixed effects models to explore which patient-level factors explain variations. In stage II, we regressed the fixed effects from stage I against an array of hospital characteristics. Results: The number of patients analysed ranged from 18,875 (CABG) to 549,036 (childbirth), and the number of hospitals ranged from 28 (CABG) to 151 (appendectomy, hernia and hip replacement). Across the ten treatments, patient factors explained between 32% (stroke) and 72% (breast cancer and knee replacement) of the observed variation in costs. In the LoS analyses, the corresponding figures were 28% (stroke) and 63% (hip replacement). A higher number of diagnoses were consistently associated with higher cost and longer LoS. A higher number of procedures had a similar effect for 9 of the 10 treatments. The effects of age and gender were mixed, but higher levels of deprivation were associated with longer stays in 8 of the 10 treatments analysed. LoS was significantly longer for patients who were cared for by more than one hospital doctor, regardless of the treatment received. In the seven surgical interventions, wound infection was always associated with longer stays and usually with higher cost. Emergency admissions increased LoS for all conditions except stroke. After accounting for these patient-level factors, substantial variation in costs and LoS among hospitals was evident for all ten treatments. These variations could not be explained by hospital characteristics such as size, teaching status, and the amount of the treatment in question that the hospital performed. We found that average hospital costs or LoS were correlated across similar types of treatments, notably hernia, cholecystectomy and appendectomy and hip and knee replacement. A small number of hospitals had considerably lower average costs or LoS for most treatments; similarly some hospitals had considerably higher average costs or LoS. Conclusion: The findings suggest that all hospitals have scope to make efficiency savings in at least one of the clinical areas considered by this study. A small number of hospitals have higher average costs or LoS across multiple treatments than their counterparts, and this cannot be explained by the characteristics of their patients or the quality of care. These hospitals are likely to struggle financially under Payment by Results (PbR) and need to consider how to improve their use of resources.

Suggested Citation

  • James Gaughan & Anne Mason & Andrew Street & Padraic Ward, 2012. "English Hospitals Can Improve Their Use of Resources: An Analysis of Costs and Length of Stay for Ten Treatments," Working Papers 078cherp, Centre for Health Economics, University of York.
  • Handle: RePEc:chy:respap:78cherp
    as

    Download full text from publisher

    File URL: http://www.york.ac.uk/media/che/documents/papers/researchpapers/CHERP78_English_hospitals_improve_use_of_resources_analysis_costs_length_of_stay.pdf
    File Function: First version, 2012
    Download Restriction: no

    References listed on IDEAS

    as
    1. Brigitte Dormont & Carine Milcent, 2004. "The sources of hospital cost variability," Health Economics, John Wiley & Sons, Ltd., vol. 13(10), pages 927-939.
    2. Laudicella, Mauro & Olsen, Kim Rose & Street, Andrew, 2010. "Examining cost variation across hospital departments-a two-stage multi-level approach using patient-level data," Social Science & Medicine, Elsevier, vol. 71(10), pages 1872-1881, November.
    3. Reinhard Busse & Alexander Geissler & Anne Mason & Zeynep Or & David Scheller‐Kreinsen & Andrew Street & Andrew Street & Conrad Kobel & Thomas Renaud & Josselin Thuilliez, 2012. "How Well Do Diagnosis‐Related Groups Explain Variations In Costs Or Length Of Stay Among Patients And Across Hospitals? Methods For Analysing Routine Patient Data," Health Economics, John Wiley & Sons, Ltd., vol. 21, pages 6-18, August.
    4. Reinhard Busse & Alexander Geissler & Anne Mason & Zeynep Or & David Scheller‐Kreinsen & Andrew Street & Zeynep Or & Thomas Renaud & Josselin Thuilliez & Cora Lebreton, 2012. "Diagnosis Related Groups And Variations In Resource Use For Child Delivery Across 10 European Countries," Health Economics, John Wiley & Sons, Ltd., vol. 21, pages 55-65, August.
    5. Reinhard Busse & Alexander Geissler & Anne Mason & Zeynep Or & David Scheller‐Kreinsen & Andrew Street & James Gaughan & Conrad Kobel & Caroline Linhart & Anne Mason & Andrew Street & Padraic Ward, 2012. "Why Do Patients Having Coronary Artery Bypass Grafts Have Different Costs Or Length Of Stay? An Analysis Across 10 European Countries," Health Economics, John Wiley & Sons, Ltd., vol. 21, pages 77-88, August.
    6. Reinhard Busse & Alexander Geissler & Anne Mason & Zeynep Or & David Scheller‐Kreinsen & Andrew Street & Anne Mason & Zeynep Or & Thomas Renaud & Andrew Street & Josselin Thuilliez & Padraic Ward, 2012. "How Well Do Diagnosis‐Related Groups For Appendectomy Explain Variations In Resource Use? An Analysis Of Patient‐Level Data From 10 European Countries," Health Economics, John Wiley & Sons, Ltd., vol. 21, pages 30-40, August.
    7. Silvio Daidone & Andrew Street, 2011. "Estimating the costs of specialised care," Working Papers 061cherp, Centre for Health Economics, University of York.
    8. repec:dau:papers:123456789/5426 is not listed on IDEAS
    9. Reinhard Busse & Alexander Geissler & Anne Mason & Zeynep Or & David Scheller‐Kreinsen & Andrew Street & Alexander Geissler & David Scheller‐Kreinsen & Wilm Quentin, 2012. "Do Diagnosis‐Related Groups Appropriately Explain Variations In Costs And Length Of Stay Of Hip Replacement? A Comparative Assessment Of Drg Systems Across 10 European Countries," Health Economics, John Wiley & Sons, Ltd., vol. 21, pages 103-115, August.
    10. Cookson, Richard & Laudicella, Mauro, 2011. "Do the poor cost much more? The relationship between small area income deprivation and length of stay for elective hip replacement in the English NHS from 2001 to 2008," Social Science & Medicine, Elsevier, vol. 72(2), pages 173-184, January.
    11. Saskia Drösler & Patrick Romano & Lihan Wei, 2009. "Health Care Quality Indicators Project: Patient Safety Indicators Report 2009," OECD Health Working Papers 47, OECD Publishing.
    12. Silvio Daidone & Francesco D’Amico, 2009. "Technical efficiency, specialization and ownership form: evidences from a pooling of Italian hospitals," Journal of Productivity Analysis, Springer, vol. 32(3), pages 203-216, December.
    13. Kim Rose Olsen & Andrew Street, 2008. "The analysis of efficiency among a small number of organisations: How inferences can be improved by exploiting patient-level data," Health Economics, John Wiley & Sons, Ltd., vol. 17(6), pages 671-681.
    14. Halvorsen, Robert & Palmquist, Raymond, 1980. "The Interpretation of Dummy Variables in Semilogarithmic Equations," American Economic Review, American Economic Association, vol. 70(3), pages 474-475, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Joanna Thorn & Emma Turner & Luke Hounsome & Eleanor Walsh & Jenny Donovan & Julia Verne & David Neal & Freddie Hamdy & Richard Martin & Sian Noble, 2016. "Validation of the Hospital Episode Statistics Outpatient Dataset in England," PharmacoEconomics, Springer, vol. 34(2), pages 161-168, February.
    2. Joanna C. Thorn & Emma Turner & Luke Hounsome & Eleanor Walsh & Jenny L. Donovan & Julia Verne & David E. Neal & Freddie C. Hamdy & Richard M. Martin & Sian M. Noble, 2016. "Validation of the Hospital Episode Statistics Outpatient Dataset in England," PharmacoEconomics, Springer, vol. 34(2), pages 161-168, February.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:chy:respap:78cherp. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gill Forder). General contact details of provider: http://edirc.repec.org/data/chyoruk.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.