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Multiple-regression hospitalization-cost model for pharmacy cost analysis.

M S Phillips, D D Bradham, R B Williams

    American Journal of Hospital Pharmacy
    |March 1, 1986
    PubMed
    Summary
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    A regression model identified key factors influencing hospital costs for cardiothoracic procedures (DRG 108). Pharmaceutical services and patient-specific factors significantly impacted adjusted total costs, highlighting potential for cost-effective service planning.

    Area of Science:

    • Health Economics
    • Hospital Administration
    • Pharmaceutical Services

    Background:

    • Hospital costs are a significant concern in healthcare.
    • Understanding cost drivers is crucial for financial management.
    • Pharmaceutical services represent a substantial component of hospital expenditures.

    Purpose of the Study:

    • To develop and test a multiple-regression model for measuring the impact of pharmaceutical services on hospital costs.
    • To identify patient-specific and treatment-specific factors correlating with total and adjusted hospital costs for a specific diagnosis-related group (DRG).

    Main Methods:

    • A multiple-regression model was developed using hospital data from a university teaching hospital for fiscal year 1983.
    • Data from 100 patients undergoing cardiothoracic procedures (DRG 108) were analyzed.

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  • Patient demographics, severity, treatment intensity, and drug-use factors were included in the model.

    • Main Results:

    • The developed model accounted for 95.6% of the variation in adjusted total cost.
    • Significant cost-influencing factors included length of stay, secondary surgical procedures, operating room supplies/drugs, and specific drug therapies (tobramycin, i.v. electrolytes, i.v. fluids).

    Conclusions:

    • The regression model effectively assessed the cost impact of drug therapy choices and specific services for a single DRG.
    • Further testing across different DRGs and institutions is recommended.
    • Improved billing information, cost-estimation techniques, and clinical service records are needed to enhance the model's utility for planning cost-effective services.