Exploring the relationship between costs and quality: Does the joint evaluation of costs and quality alter the ranking of Danish hospital departments?

Hvenegaard, Anne, Arendt, Jacob Nielsen, Street, Andrew and Gyrd-Hansen, Dorte (2011) Exploring the relationship between costs and quality: Does the joint evaluation of costs and quality alter the ranking of Danish hospital departments?. European Journal of Health Economics, 12 6: 541-551. doi:10.1007/s10198-010-0268-9

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Author Hvenegaard, Anne
Arendt, Jacob Nielsen
Street, Andrew
Gyrd-Hansen, Dorte
Title Exploring the relationship between costs and quality: Does the joint evaluation of costs and quality alter the ranking of Danish hospital departments?
Journal name European Journal of Health Economics   Check publisher's open access policy
ISSN 1618-7598
1618-7601
Publication date 2011-12
Year available 2010
Sub-type Article (original research)
DOI 10.1007/s10198-010-0268-9
Volume 12
Issue 6
Start page 541
End page 551
Total pages 11
Place of publication Heidelberg, Germany
Publisher Springer
Collection year 2012
Language eng
Formatted abstract
Objective: The purpose is to evaluate the relationship between costs and quality and to assess whether the joint evaluation of costs and quality affects the ranking of hospital departments relative to comparison based on costs alone.
Methods: Using patient level data for 3,754 patients in six vascular departments, we estimate fixed effect models for costs (linear) and quality (logistic). We consider two quality measures; mortality and wound complications. To assess whether the joint evaluation of costs and quality affects the ranking of departments, we construct joint confidence regions for each pair of departmental effects for costs and quality using a bootstrap method and rank departments according to their cost-effectiveness ratio. The findings are used to evaluate a theory of a U-shaped cost/quality relationship.
Results: The association between cost and quality differs depending on how quality is measured. Lower costs are associated with higher mortality, implying a cost/quality trade-off. In contrast, there is no clear association between costs and wound complications among vascular departments.
Conclusions: Compared to benchmarking of departments based solely on their costs, we show that the ranking of departments may be altered considerably when quality is taken into account. Consequently, it is important to have a well-rounded view of departmental objectives when undertaking performance evaluation. The results for mortality may lend some support to the theory of a U-shaped cost/quality relationship. However, the results for wound complications do not support the theory of a U-shaped cost/quality relationship.
Keyword Hospital costs
Efficiency
Quality
Cost-effectiveness
Q-Index Code C1
Q-Index Status Confirmed Code
Institutional Status UQ
Additional Notes Published "Online First" 02 August 2010

Document type: Journal Article
Sub-type: Article (original research)
Collections: Official 2012 Collection
ERA 2012 Admin Only
School of Medicine Publications
 
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Citation counts: TR Web of Science Citation Count  Cited 9 times in Thomson Reuters Web of Science Article | Citations
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Created: Thu, 20 Oct 2011, 13:35:21 EST by Dorte Gyrd-hansen on behalf of Medicine - Royal Brisbane and Women's Hospital