Truly Inefficient or Providing Better Quality of Care? Analysing the Relationship Between Risk-Adjusted Hospital Costs and Patients’ Health Outcomes

TY - UNPB

T1 - Truly Inefficient or Providing Better Quality of Care?

T2 - Analysing the Relationship Between Risk-Adjusted Hospital Costs and Patients’ Health Outcomes

AU - Gutacker, Nils

AU - Bojke, Chris

AU - Daidone, Silvio

AU - Devlin, Nancy

AU - Parkin, David

AU - Street, Andrew

PY - 2011/10

Y1 - 2011/10

N2 - Accounting 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.

AB - Accounting 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.

KW - hospital costs

KW - efficiency

KW - patient outcomes

KW - PROMs

KW - cost-quality relationship

M3 - Discussion paper

T3 - CHE Research Paper

BT - Truly Inefficient or Providing Better Quality of Care?

PB - Centre for Health Economics, University of York

CY - York, UK

ER -