Demand Uncertainty, Reserve Margins, Hospital Costs. Executive Summary ofDissertation

摘要

The stochastic nature of illness causes the demand for hospital services torandom. In order to accommodate this random demand, hospitals set aside capacity, or a reserve margin. This dissertation examines the causes and cost impact of hospital reserve margins. Hospital specific data are used to estimate two sets of models. In the first of these the determinants of hospital reserve margins are estimated using both ordinary least squares regressions and instrumental variables regressions. These determinants are classified into four major groups: price, relative capacity, quality, and other exogenous factors. Predicted values of the reserve margin taken from the first set of models are then used as regressors in translog cost functions when estimating the second set of models. These models give the variable cost impact of hospital reserve margins.