Including quality, access, and efficiency in healthcare cost models

The authors investigated cost models that incorporate quality, access, and efficiency to provide decision support for resource forecasting in the multi-billion-dollar U.S. Army health system. As the Army relocates thousands of troops, the medical system must plan for changes in demand; this study supports that effort. Loglinear cost models that include data envelopment analysis (DEA) efficiency scores were evaluated through ordinary least squares estimation, ridge regression, and robust regression, and serve as the analytical framework. Parsimonious models that incorporate a simple volume-complexity metric, a DEA metric, a quality metric, and medical center status variable provide superior forecasting capability.