Variation in unit costs of hospitals in the English National Health Service

摘要

Objectives: In England, the Department of Health places high priority on reducing the variation in unit costs ofnNational Health Service (NHS) hospitals. Ef. ciency targets are set for hospitals to create incentives for relativelynhigh cost hospitals to reduce their costs and shift performance closer to that of their lower cost counterparts. Wenexamine empirically the dispersion in unit costs to assess the extent of variation in the productivity of hospitals andntrends over time.nMethods: We use econometric panel data techniques on data from 235 NHS acute hospital trusts over a six-yearnperiod, 1994/95 to 1999/00, supplemented with information from semi-structured interviews with key individuals innhospitals and purchasing bodies.nResults: There appears to have been no reduction in variation during this period. Relative unit costs for individualntrusts also appear stable, with littlemovement from relatively high cost to low cost. Judging from limited quantitativenevidence outside health care, the variation in costs between NHS hospitals may be comparatively low.nConclusions: Given all the other aspects of hospital performance that government is seeking to change, reductionnin the dispersion of unit costs per se should not be a major policy objective. It is far more important to examinenvariation in quality-adjusted unit costs.