Money consuming monuments or efficient echelons?--Assessing the economic role of hospitals in national health care systems.

Abstract

A comprehensive cost-benefit analysis of a national health care system would due to conceptual reasons and formidable technical problems result in crude or disputable estimates. Therefore, this paper argues that an economical assessment cannot avoid delineating health care into its different sectors, and looking into them separately. An analysis of the hospital sector is suggested to be pursued in the following order: First, the proportion of total health care expenditure allocated to hospitals is calculated. Second, cost per service is measured and the relative importance of input factors on that estimate of internal efficiency (productivity) are analysed. Third, distribution of service utilisation is determined, relating it to structural and demographic variables. Fourth, the impact of funding mechanisms is noted as an important marginal condition for economical performance. The paper discusses methods for each stage of analysis using examples from the Nordic countries.