✦ LIBER ✦

On measuring the hospital cost/quality trade-off

✍ Scribed by Kathleen Carey; James F. Burgess JR.

Publisher: John Wiley and Sons
Year: 1999
Tongue: English
Weight: 85 KB
Volume: 8
Category: Article
ISSN: 1057-9230
DOI: 10.1002/(sici)1099-1050(199909)8:6<509::aid-hec460>3.0.co;2-0

No coin nor oath required. For personal study only.

✦ Synopsis

This paper explores the relationship between cost and quality of hospital care. A total operating cost function is estimated for 137 US Department of Veterans Affairs hospitals for 1988-1993 using three rate-based measures of quality as regressors. The high likelihood of the existence of measurement error in quality in the cross section leads to the application of novel instrumental variable techniques. Results suggest that mortality and readmission indices are adjusted inadequately for illness severity. The measure on the failure to follow up inpatient discharges with outpatient care, however, appears to increase cost. The results of this paper underscore a number of practical difficulties and challenges facing government or other systems in evaluating the relative performance of their hospitals.

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