Stochastic demand, production responses and hospital costs

D Hughes, A McGuire

Research output: Contribution to journalArticlepeer-review

50 Citations (Scopus)

Abstract

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. (C) 2003 Elsevier B.V. All rights reserved.
Original languageEnglish
Pages (from-to)999 - 1010
Number of pages12
JournalJOURNAL OF HEALTH ECONOMICS
Volume22
Issue number6
DOIs
Publication statusPublished - Nov 2003

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