Stochastic demand, production responses and hospital costs.
This paper considers the production responses to demand uncertainty within the hospital sector. It is noted that such responses have an impact on hospital cost structures. An empirical model is specified. Estimation is undertaken on a sample of UK hospitals over the period 1993-1995, differentiating between hospital output which arises from uncertain demand (emergency treatment) and output considered to be predictable (elective treatment). The model estimates that the cost of an elective admission is approximately 45% of the cost of an emergency admission. Demand uncertainty imposes a direct cost equivalent to around 5% of the total cost of emergency admission.
Hughes
David
D
HM Treasury, 1 Horse Guards Road, SW1A 2HQ, London, UK. david.hughes@hm-treasury.x.gsi.gov.uk
McGuire
Alistair
A
D017558:Elective Surgical Procedures / Q000706:statistics & numerical data; D004638:Emergency Treatment / Q000706:statistics & numerical data; D005544:Forecasting / Q000379:methods*; D006301:Health Services Needs and Demand / Q000145:classification / Q000191:economics / Q000639:trends*; D006302:Health Services Research; D017721:Hospital Costs / Q000706:statistics & numerical data*; D006752:Hospital Planning / Q000191:economics / Q000379:methods*; D006779:Hospitals, Public / Q000191:economics / Q000706:statistics & numerical data*; D006801:Humans; D017059:Models, Econometric; D010343:Patient Admission / Q000191:economics / Q000639:trends*; D013222:State Medicine / Q000191:economics; D013269:Stochastic Processes; D035501:Uncertainty; D006113:United Kingdom