Document Detail

Issues in cost function specification for neonatal care: the Fordham case.
MedLine Citation:
PMID:  9138217     Owner:  NLM     Status:  MEDLINE    
BACKGROUND: Econometric techniques have been used to examine the relationship between costs of provision, case mix and unit size for health care providers. Estimation of cost functions in a health care context is complicated by poor understanding of the underlying production relationship and the constraints under which production takes place. Different results and policy implications can follow from different model specifications. This underscores the need for care in the construction of such functions and the interpretation of their results. METHODS: Cost and activity data from a study of neonatal care for an English Regional Health Authority are re-examined. Cost functions are estimated using alternative functional forms, and average cost per day is estimated and compared for two of these functions [one produced by Fordham et al. (J Publ Hlth Med 1992; 14(2): 127-130) and the other based more explicitly in economic and econometric theory]. RESULTS: It is shown that estimates of average cost per day are sensitive to model specification. Such are the differences in cost that significantly different policy implications could follow from the different models. CONCLUSION: We conclude that care must be taken in the construction and estimation of cost functions and that the assumptions upon which they rest be made explicit so that results can be properly interpreted.
C O'Neill; A Largey
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Publication Detail:
Type:  Journal Article    
Journal Detail:
Title:  Journal of public health medicine     Volume:  19     ISSN:  0957-4832     ISO Abbreviation:  J Public Health Med     Publication Date:  1997 Mar 
Date Detail:
Created Date:  1997-07-16     Completed Date:  1997-07-16     Revised Date:  2004-11-17    
Medline Journal Info:
Nlm Unique ID:  9011205     Medline TA:  J Public Health Med     Country:  ENGLAND    
Other Details:
Languages:  eng     Pagination:  50-4     Citation Subset:  IM    
Department of Economics, Queen's University of Belfast.
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MeSH Terms
Cost Allocation / methods*
Health Services Research / methods
Hospital Costs / statistics & numerical data
Infant, Newborn
Intensive Care Units, Neonatal / economics*
Models, Econometric*
Regional Health Planning / economics
Comment In:
J Public Health Med. 1997 Dec;19(4):479-81   [PMID:  9467161 ]

From MEDLINE®/PubMed®, a database of the U.S. National Library of Medicine

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