Analytical Models for Decision Making

By Colin Sanderson; Reinhold Gruen | Go to book overview

9
Hospital models

Overview

Decision support systems are widely used in the hospital sector to assist in planning activity and budgets. In this chapter you will learn about the interrelation between activity changes and costs and then examine the use of a hospital model to forecast activity in an acute care setting. You will consider multiple linear regression as a modelling technique that can process aggregate data from many hospitals to identify predictors of cost and then look at case mix models that are based on detailed data from hospital management information systems.


Learning objectives
By the end of this chapter, you will be better able to:
identify different types of cost and explain how they change with activity
discuss alternative approaches to estimation of hospital costs
outline the use of a hospital model in activity and capacity planning
interpret and use models based on multiple linear regression
give examples of alternative approaches to modelling hospital costs
explain the use of DRGs in hospital management

Key terms

Diagnosis related groups (DRG) Classification system that assigns patients to categories on the
basis of the likely cost of their episode of hospital care. Used as a basis for determining level of
prospective payment by purchaser.

Fixed cost A cost of production that does not vary with the level of output.

Flexible budget A budget showing comparative costs for a range of levels of activity.

Semi-variable costs Costs that contain both a fixed and a variable element.

Total (economic) cost The sum of all costs of an intervention or health problem.

Variable cost A cost of production that varies directly with the level of output.

-164-

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Analytical Models for Decision Making
Table of contents

Table of contents

  • Understanding Public Health ii
  • Title Page iii
  • Contents v
  • Acknowledgements vii
  • Overview 1
  • Section 1 - Models and Decision Making in Health Care 5
  • 1: The Role of Models 7
  • 2: Building a Decision Support Model 28
  • 3: Strategic Options Development and Analysis 43
  • Section 2 - Methods for Clarifying Complex Decisions 63
  • 4: Many Criteria 65
  • 5: Uncertainty 84
  • 6: Risk 103
  • Section 3 - Models for Service Planning and Resource Allocation 119
  • 7: Population Need for a Specific Service 121
  • 8: Balanced Service Provision 142
  • 9: Hospital Models 164
  • Section 4 - Modelling for Evaluating Changes in Systems 179
  • 10: Modelling Flows Through Systems 181
  • 11: Irregular Flows Systems with Queues 202
  • 12: Outline Review 223
  • Glossary 227
  • Index 231
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