Truly inefficient or providing better quality of care? Analysing the relationship between risk adjusted hospital costs and patients’ health outcomes

Posted on 14 October 2011

The latest CHE Research Paper is now available CHE Research Paper 68 (PDF , 381kb)

Researchers from the Centre for Health Economics, the Office of Health Economics, and NHS South of England have been exploring the link between hospital costs and patients' health outcomes. This study uses information on patient reported health measures (PROMs) collected for all NHS patients having hip or knee surgery, varicose vein or hernia operations. There is substantial variation among hospitals in the costs of treating patients with these conditions, even after accounting for their characteristics and health outcomes. While the relationship between costs and outcomes is generally positive, there are some high cost hospitals with poor health outcomes. This means that hospitals cannot simply claim that their superior outcomes justify their higher costs.