A Cost-Effectiveness Framework for Profiling the Value of Hospital Care

Justin W. Timbie, Joseph Newhouse, Meredith B. Rosenthal and Sharon-Lise T. Normand
Additional contact information
Justin W. Timbie: Department of Health Care Policy, Harvard Medical School, Cambridge, Massachusetts, justinti@med.umich.edu
Meredith B. Rosenthal: Department of Health Policy and Management, Harvard School of Public Health, Cambridge, Massachusetts
Sharon-Lise T. Normand: Department of Health Care Policy, Harvard Medical School, Cambridge, Massachusetts, Department of Biostatistics, Harvard School of Public Health, Cambridge, Massachusetts

Medical Decision Making, 2008, vol. 28, issue 3, 419-434

Abstract: Provider profiling and performance-based incentive programs have expanded in recent years but need a theoretical framework for measuring and comparing the ``value'' of clinical care across medical providers. Cost-effectiveness analysis provides such a framework but has rarely been used outside of the treatment choice context. The authors present a profiling framework based on cost-effectiveness methods and illustrate their approach using data on in-hospital survival and the cost of care for a heart attack from a sample of Massachusetts hospitals during fiscal year 2003. They model each outcome using hierarchical models that allow performance to vary across hospitals as a function of a latent quality effect and an effect of case mix. They also estimate incremental outcomes by conditioning on each hospital's pair of random effects, using indirect standardization to estimate ``expected'' outcomes, and then taking their difference. Incremental cost and effectiveness outcomes are combined using incremental net monetary benefits. Using cost-effectiveness methods to profile hospital ``value'' permits the comparison of the benefit of a service relative to the cost using existing societal weights.

Keywords: cost-benefit analysis; myocardial infarction; outcome assessment; risk adjustment. (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/0272989X07312476 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:medema:v:28:y:2008:i:3:p:419-434

DOI: 10.1177/0272989X07312476

Access Statistics for this article

More articles in Medical Decision Making
Bibliographic data for series maintained by SAGE Publications ().