Cost variation in diabetes care delivered in English hospitals

We analysed the in-hospital costs of diabetic patients admitted to English hospitals and aimed to assess what proportions of cost variation are explained by patient and hospital characteristics.

We used Hospital Episode Statistics and reference costs for all patients admitted to diabetes care for all English hospitals for the financial year 2005/2006. Our sample included 31 371 patients admitted to 148 hospitals. We applied a multi-level approach. We analysed the relationship between patient costs and patient characteristics. We estimated the average cost of being treated in each hospital after controlling for patient characteristics. In addition, we explored why these average costs vary across hospitals.

Much of the variation in the costs of controlling diabetes was driven by the Healthcare Resource Group to which the patient was allocated, but costs were also higher for patients who were transferred between hospitals, suffered infections and other complications, or for those who died in hospital. Even so, approximately 8-9% of the variation in costs was related to the hospital in which the patient was treated, with geographical variation in factor prices being the prime reason for this variation. The volume of patients, and the number and diversity of specialties involved in caring for diabetic patients did not explain the variation in the cost of treating diabetic patients across hospitals.

Healthcare Resource Groups and diagnostic markers are significant patient-related cost drivers in diabetes care. Costs are not lower in hospitals with a high volume of patients and where diabetes care is concentrated in few specialties.