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Related Experiment Videos

Improving performance in public hospitals: a role for comparative costs?

D Dawson1, M Goddard, A Street

  • 1Centre for Health Economics, University of York, York YO10 5DD, UK.

Health Policy (Amsterdam, Netherlands)
|July 19, 2001
PubMed
Summary
This summary is machine-generated.

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English hospitals face cost-reduction targets to improve performance. However, insufficient incentives and multiple cost-measurement indices may hinder actual cost improvements in the healthcare sector.

Area of Science:

  • Health Economics
  • Public Policy
  • Hospital Management

Background:

  • The English government implemented cost-reduction targets for acute hospitals to drive performance improvements.
  • This policy is analogous to 'yardstick competition,' a strategy used to enhance efficiency in non-competitive industries.

Purpose of the Study:

  • To evaluate the potential effectiveness of government-set unit cost reduction targets for English acute hospitals.
  • To identify factors that may impede the realization of anticipated cost improvements.

Main Methods:

  • Analysis of the policy framework for setting acute hospital cost targets in England.
  • Examination of the principles of 'yardstick competition' and its applicability to healthcare.
  • Review of incentives and measurement methodologies for comparative cost analysis in hospitals.

Related Experiment Videos

Main Results:

  • Incentives to act on comparative cost data appear insufficient for effective response.
  • The existence of multiple, potentially conflicting, indices for measuring relative hospital costs complicates target setting.
  • Unit cost comparisons are highly sensitive to the specific measurement techniques employed.

Conclusions:

  • The effectiveness of current cost-reduction targets in English acute hospitals is questionable due to inadequate incentives.
  • The variability in cost-measurement indices necessitates caution when establishing performance targets.
  • Policy interventions should address both incentive structures and standardization of cost-measurement methodologies for greater impact.