Lecture 6 - Geographical Configuration of Hospitals Flashcards
Was it worth expanding hospital capacity during COVID?
- Yes: political capital, leaders demonstrating they were doing something
- Yes: insurance, have extra capacity just in case
- No: opportunity cost, effort and money better spent on other resources
- No: over capacity: created too much capacity
What is an opportunity cost?
Opportunity cost refers to the potential benefit you give up when you choose one option over another.
What challenges did the Bishkek hospital sector face
- Servied about 15% of total Kygryz population
- Health budget was 9% of GDP in 1991 and dropped to 3% in 1993
- Had 2 types of hospitals; city hospitals that were funded through city taxes and Republican hospitals that were funded through federal budget
- Kyrgystan had 26 hospitals and 12 specialist hospitals with over 50% of admissions coming from Bishkek
- ALoS was 17 days, huge variation based on condition, 100+ days for TB
- 4 challenges:
1. too many hospitals; impossible to afford or maintain given budget
2. ALoS very high
3. Too many beds for safe delivery of care (too close, beds where there shouldn’t be)
4. Little day case activity - Hospitals were funded based on line item budgeting. This was the reason there were so many beds because budget for equipment/maintenance was based on the number of beds
Street and Haycock (1999)
- Wanted to see how many beds were needed in Bishkek hospital sector under different scenarios
Recommended 2 plans
1. Improve performance: reduce turnover itnerval, reduce admissions, reduce ALoS and increase day cases
2. Programme of rationalisation: close facilities, merge facilities
- Programme of rationalisation was more difficult to do politically
- Using performance improvement recommendation, no fixed costs are saved because you don’t close any hospitals
- 18 years later: the bed numbers were reduced, ALoS went down more than anticipated and admissions went up though they were expected to do down (some assumptions ended up being wrong)
What is turnover interval?
The time a bed is empty between patients
What is the formula for inpatient beds?
Inpatient beds = (inpatient admissions x (ALoS + TI))/working days
Bit = [Qit(Zit + TIit)/bit]
Qit: inpatient admissions
Zit: ALoS
TIit: turnover interval
bit: working days (365)
Green (2002)
Target occupancy for hospital beds is 85%
What is the equation for inpatient beds taking into account target occupancy rate?
Bit = 1/w[Qit(Zit + TIit)/bit]
w: occupancy rate parameter (0.85 or 1 for simplicity)
Qit: inpatient admissions
Zit: ALoS
TIit: turnover interval
bit: working days (365)
What is the equation for day case beds?
Day case beds = (day case admissions x ALoS)/DC working days
Bit = (Qit x Zit)/b2it
Qit: inpatient admissions
Zit: ALoS
b2it: working days (260 working days)
How do you calculate total hospital beds?
Total beds = inpatient beds + day case beds
Bit = pit[Qit(Z1it + TIit)/b1it] + [(1-pit)(Qit Z2it/b2it)]
pit is the proportion of individuals admitted as inpatients rather than day cases
How do you calculate average cost?
= total cost/quantity
What is marginal cost?
The amount that cost increases when an additional unit of output is produced
How do you calculate marginal cost?
MC = (TCq-q-1)/(qq-qq-1)
Xq-1: one less quantity
What are the linear total cost and marginal cost functions?
TC = fixed costs + (varibale costs x quantity)
MC = △TC/△q
What are CRS, DRS, IRS and VRS?
CRS: constant returns to scale, output increases by the same proportional to changes in inputs
DRS: decreasing returns to scale, output increases by less than the proportional change in inputs, spend more to get one extra unit of activity
IRS: increasing returns to scale, output increases by more proportional to change in inputs
VRS: varying returns to scale, can be a mixture of IRS, CRS and DRS
