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PubMed2001

Estimating log models: to transform or not to transform?

Health economists often use log models to deal with skewed outcomes, such as health utilization or health expenditures. The literature provides a number of alternative estimation approaches for log models, including ordinary least-squares on ln(y) and generalized linear models. This study examines how well the alternative estimators behave econometrically in terms of bias and precision when the data are skewed or have other common data problems (heteroscedasticity, heavy tails, etc.). No single alternative is best under all conditions examined. The paper provides a straightforward algorithm for choosing among the alternative estimators. Even if the estimators considered are consistent, there can be major losses in precision from selecting a less appropriate estimator.

Delivery of Health Care, Integrated↗
PubMedDate not supplied

Hospital cost control in Norway: a decade's experience with prospective payment.

Under Norway's prospective payment system, which was in existence from 1972 to 1980, hospital costs increased 15.8 percent annually, compared with 15.3 percent in the United States. In 1980 the Norwegian national government started paying for all institutional services according to a population-based, morbidity-adjusted formula. Norway's prospective payment system provides important insights into problems of controlling hospital costs despite significant differences, including ownership of medical facilities and payment and spending as a percent of GNP. Yet striking similarities exist. Annual real growth in health expenditures from 1972 to 1980 in Norway was 2.2 percent, compared with 2.4 percent in the United States. In both countries, public demands for cost control were accompanied by demands for more services. And problems of geographic dispersion of new technology and distribution of resources were similar. Norway's experience in the 1970s demonstrates that prospective payment is no panacea. The annual budget process created disincentives to hospitals to control costs. But Norway's changes in 1980 to a population-based methodology suggest a useful approach to achieve a more equitable distribution of resources. This method of payment provides incentives to control variations in both admissions and cost per case. In contrast, the Medicare approach based on Diagnostic Related Groups (DRGs) is limited, and it does not affect variations in admissions and capital costs. Population-based methodologies can be used in adjusting DRG rates to control both problems. In addition, the DRG system only applies to Medicare payments; the Norwegian experience demonstrates that this system may result in significant shifting of costs onto other payors.

Cost Control↗
PubMed2000

Expenditure on health care incurred by diabetic subjects in a developing country--a study from southern India.

The objective of the study was to estimate the direct costs of diabetes care to patients attending secondary care facilities in Madras, India. A total of 596 subjects were studied, at the Private Hospital for Diabetes Mellitus (PHD) (n = 422), and at the Government General Hospital (GGH) (n = 174). A simple interview schedule enabled a face to face interaction with the patients by the research investigator which elicited a frank and true response. The validity of the data collected was established by independent scrutiny of financial records in a sub sample. Payment bills for expenses of 140 subjects chosen on a random basis from the total sample of 422 PHD patients were compared with the costs reported by the subjects. There were no statistically significant differences both in the inpatient and the outpatient cases between the reported cost and actual cost. Median bill value (total costs)=Rs.1010 (range 195-16700) reported value=880 (110-20355) Z = -0.97, P = 0.33 and, for outpatients, median bill value=Rs.800 (195-4560) reported value=Rs. 740 (110-6320) Z = -1.56, P = 0.12. For inpatients, median bill value = Rs. 4235 (1289-16700) reported value=Rs.5459 (1285-20355), Z = -1.27, P5 years duration of diabetes spent more than those who had <5 years of duration; Rs.5570 (360-75200) and Rs.3220, (460-25600), respectively. All differences between these sub-groups were statistically significant. Within the ambit of economic aspects of the population in a developing country, the direct cost on diabetes health care is very high for many people.

Costs and Cost Analysis↗
PubMed2001

Estimating the costs of epilepsy: an international comparison of epilepsy cost studies.

PURPOSE: To compare systematically the national and per capita estimates of the cost of epilepsy in different countries. METHODS: Studies for this literature review were selected by conducting a Medline literature search from January 1966 to March 2000. Key methodologic, country-related, and monetary issues of the selected epilepsy cost studies were evaluated to compare their direct cost estimates and to explore their distribution. The results of the selected studies were made comparable by converting them with different types of conversion factors and expressing them as a proportion of the national expenditure on health care. RESULTS: Ten epilepsy cost studies were reviewed. The proportion of national health care expenditure on epilepsy shows a range of 0.12-1.12% or 0.12-1.05% depending on the type of conversion factor. The list of cost components included in the estimation of the direct costs of epilepsy differs from study to study. A comprehensive list is associated with a decrease in the contribution of drug and hospital costs to the total direct costs of epilepsy. CONCLUSIONS: This study highlights the importance of studying the economic consequences of epilepsy and of interpreting the results on the international level. The results of epilepsy cost studies can provide insight into the distribution of the costs of epilepsy and the impact of epilepsy on the national expenditure on health care.

Anticonvulsants↗
PubMed1996

Health care spending in 1994: slowest in decades.

Falling medical prices and slowing growth in private health insurance premiums diverted the spotlight from large-scale reform of the health care system in 1994. In aggregate, growth in health expenditures dropped to its lowest rate in more than thirty years. Even at this low rate, health spending grew faster than gross domestic product (GDP), but the economy easily absorbed these modest increases. In this picture of moderation, there was one disconcerting note: Medicare spending continued to increase at double-digit rates. Although Medicare's more rapid spending growth seems out of sync with the current modest health spending growth trends in the private sector, closer examination of factors accounting for growth in 1994 suggests that some difference is warranted.

Cost Control↗
PubMed1986

Health Services Research and Development: the Veterans Administration Program.

Health expenditures are rising inexorably; health status shows relatively little gain; technological possibilities are outstripping our ability or willingness to provide a commensurate level of resources. Clinical and administrative managers face increasingly difficult choices among alternative interventions in attempting to resolve these problems. If health services research is to succeed as a tool for assisting these decisions, clinicians, administrators, and researchers must view it as an integral part of management. This paper describes this concept of health services research and its implementation by the VA HSR&D Service, results from 1981 to date, and future directions. Four programs implement the Service's system to make relevant, valid information accessible to VA staff who can use it to improve veterans' health care: Investigator-Initiated Research (IIR) Program; HSR&D Field Program, which implements the Service's mission in various local areas VA-wide; Special Projects Program, responsive to system-wide issues, including technology assessment and transfer; and Resources Program, the Service's own management system. The Service's impact on improving veterans health care is already apparent. However, the true value of the HSR&D system will become apparent only in the 1990s, after the capacity for conducting health services research has been built and integrated fully with clinical and administrative practice. The VA, the nation's largest health care system, has a unique opportunity to demonstrate how health services research can improve health care.

Aged↗