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Comparing costs and outcomes across programmes of health care

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  • Stephen Martin
  • Nigel Rice
  • Peter C. Smith

Abstract

This paper examines the expenditure choices of local health authorities operating under fixed budget constraints. It applies a theoretical model of budgeting to a data set from 303 English Primary Care Trusts (PCTs) across ten broad programmes of health care to derive estimates of the elasticity of expenditure in each programme with respect to the total income of the PCT. The results suggest quite similar income elasticities across most programmes, in the range 0.644–1.128. The only outlier is the musculoskeletal programme with an elasticity of about 0.46. The modelling also derives estimates of spending elasticities with respect to medical needs and thereby permits calculation of the implicit cost of saving a life year in five programmes of care. The results are important as they indicate to policy makers how specific programme areas might be affected by general budgetary reductions. Copyright © 2011 John Wiley & Sons, Ltd.

Suggested Citation

  • Stephen Martin & Nigel Rice & Peter C. Smith, 2012. "Comparing costs and outcomes across programmes of health care," Health Economics, John Wiley & Sons, Ltd., vol. 21(3), pages 316-337, March.
    • Handle: RePEc:wly:hlthec:v:21:y:2012:i:3:p:316-337
    DOI: 10.1002/hec.1716
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    References listed on IDEAS

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    1. Stephen Martin & Nigel Rice & Peter C Smith, 2008. "The link between health care spending and health outcomes for the new English Primary Care Trusts," Working Papers 042cherp, Centre for Health Economics, University of York.
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    Cited by:

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    3. Vincent T Janmaat & Marco J Bruno & Suzanne Polinder & Sylvie Lorenzen & Florian Lordick & Maikel P Peppelenbosch & Manon C W Spaander, 2016. "Cost-Effectiveness of Cetuximab for Advanced Esophageal Squamous Cell Carcinoma," PLOS ONE, Public Library of Science, vol. 11(4), pages 1-10, April.
    4. Siverskog, Jonathan & Henriksson, Martin, 2022. "The health cost of reducing hospital bed capacity," Social Science & Medicine, Elsevier, vol. 313(C).
    5. Miszczyńska Katarzyna M. & Miszczyński Piotr M., 2020. "Inpatient Costs in the Perspective of Polish Health Policy: Scenario Analysis," South East European Journal of Economics and Business, Sciendo, vol. 15(2), pages 43-56, December.
    6. J. Raftery, 2014. "NICE’s Cost-Effectiveness Range: Should it be Lowered?," PharmacoEconomics, Springer, vol. 32(7), pages 613-615, July.
    7. Miszczyńska Katarzyna M., 2018. "Comparative Analysis of the Key Factors Influencing Healthcare Systems of OECD Countries," Financial Internet Quarterly (formerly e-Finanse), Sciendo, vol. 14(1), pages 69-78, March.
    8. Edney, L.C. & Haji Ali Afzali, H. & Cheng, T.C. & Karnon, J., 2018. "Mortality reductions from marginal increases in public spending on health," Health Policy, Elsevier, vol. 122(8), pages 892-899.
    9. Jonathan Siverskog & Martin Henriksson, 2019. "Estimating the marginal cost of a life year in Sweden’s public healthcare sector," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(5), pages 751-762, July.
    10. Laura Vallejo‐Torres & Borja García‐Lorenzo & Pedro Serrano‐Aguilar, 2018. "Estimating a cost‐effectiveness threshold for the Spanish NHS," Health Economics, John Wiley & Sons, Ltd., vol. 27(4), pages 746-761, April.
    11. Emanuele Arcà & Francesco Principe & Eddy Van Doorslaer, 2020. "Death by austerity? The impact of cost containment on avoidable mortality in Italy," Health Economics, John Wiley & Sons, Ltd., vol. 29(12), pages 1500-1516, December.

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