Spatial Econometric Model of Healthcare Spending LOCAL Garen
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Spatial Econometric Model of Healthcare Spending LOCAL! Garen Evans MISSISSIPPI STATE UNIVERSITY
Background Health Care spending as Percentage of GSP
Health Care Spending Hospitals Professional Services Long Term Care n home health care, nursing homes Personal Medical Supplies n durables, drugs, supplies Other
U. S. Personal Healthcare Spending* * Millions of 2004 dollars
US PHC Spending, 1995 -2004
Change in PHC Spending, 1995 -2004
PHC Spending in Mississippi
Personal Healthcare Spending as a Percentage of Gross State Product, 2004
Local Health Care Spending? National n n Personal health care spending Sector detail w Hospitals, home health care, etc. State n n Place-based Residence-based County ?
County-Level Spending Usage: n Quantify importance of health care in small economies w Often combined with input-output analysis. n Leverage interest in local health care w eg. , Critical Care Access Hospital designation n n Gauge effectiveness of healthcare policy as an economic engine Test global hypotheses
County-level Spending Non-structural approach n Product of LPC-adjusted state per-capita spending and local population w Patient-origin analysis w National benchmarks w Trade area capture Structural approach n Identify factors related to health care spending
Health Care Spending Factors that affect spending: n Demographic w Population distributions n Socioeconomic w Income n Market-related w Physician concentration n Policy w Managed care
Demographic Age 65+ tend to use six times the healthcare compared to younger persons n Martin, 2005 At least one chronic condition by age 70 n Neese, 2002 Out-of-pocket spending for chronic conditions varies with age n Hwang, 2001
Socioeconomic Higher growth in per-capita income leads to growth in per-capita private spending. n Smith, 1998 Almost 18% of per-capita spending due to income growth. n Peden, 1995 Spending for children in poverty was 14% higher than average. n Holahan, 2001
Market Factors Uninsured spend less than those with Medicaid n Holahan, 2001 High physician concentration generates higher levels of spending n Martin, 2002 Large provider networks exert leverage over insurers when negotiating prices. n Brudevold, 2004
Policy factors High levels of enrollment in HMOs reduces spending growth n Staines, 1993; Cutler, 1997. Medicaid managed care enrollment not a significant predictor of Medicaid expenditures. (Only state per capita income and regional differences were significant predictors of Medicaid costs. ) n Weech-Maldonado, 1995
Objectives 1. Develop local spending model. 1. 2. Counties in Mississippi Cross-sectional 2. Examine relationship of factors associated with healthcare spending. 3. Explore space.
Data Health Spending Impact Model (HSIM) n n n County-level health care spending estimates Based on state-level per-capita spending Local Purchase Coefficients w w w Hospitals Physicians, Dentists, et al. Long Term Care Medical Supplies Other
Statewide Spending Population 2. 9 million Hospital Care $7. 3 billion Per-Capita $2, 517
Local Hospital Spending 52. 2% of Oktibbeha County residents received hospital care in other counties. LPC is 47. 8% or… $1, 202 per-capita Pop 42, 454 Total: $51 million
Percentage of residents discharged from local hospital Mean: 41. 2% Std Dev. : 27. 6%
County-level per-capita spending for health care Mean: $3, 576 Max: $5, 189 Min: $956 11 < 1 SD (13%) 16 > 1 SD (19. 5%)
Data Socioeconomic/Demographic n n Per-capita income – Woods and Poole Poverty rate - Small Area Income & Poverty Estimates; US Census. Market n n Hospital – MSDH Report on Hospitals Diabetes (mortality) – MSDH Vital Statistics Insurance n Small Area Health Insurance Estimates (SAHIE; US Census) 2001
Spatial Weights Spatial clustering can occur in behavioral risk factors and outcomes n Mobley, 2006. Spatial lag can lead to biased and inconsistent estimators n Anselin, 2006
Summary Statistics PCI: $000 COVER: % not covered by health insurance HOSP: dummy (1=hospital) POVRTY: Percentage of population at below 100% poverty rate. DIABET: mortality per 100, 000 population LSPC: local spending per capita, $000 RHO 1: rook-based spatial weights RHO 2: queen-based spatial weights
Models #1 BASELINE MODEL LSPC = f(PCI, COVER, POVRTY, DIABET, HOSP) + + + #2 SPATIAL LAG MODEL (ROOK-BASED WEIGHTS) LSPC = f(PCI, COVER, POVRTY, DIABET, HOSP, RHO 1) + #3 SPATIAL LAG MODEL (QUEEN-BASED WEIGHTS) LSPC = f(PCI, COVER, POVRTY, DIABET, HOSP, RHO 2) +
Results
LSPC Moran Scatterplots Rook-based Queen-based
Local Indicators of Spatial Association (LISA) LSPC, rook LSPC, queen
Summary 1. Per-capita income, presence of hospital, poverty rate, and insurance coverage help explain local per-capita spending for healthcare services. 2. Space matters in the analysis of healthcare spending
Summary 3. Space is significant, but does not appear to be substantial… n n 1. 94% of variation in the rook model. 2. 63% of variation in the queen model. 4. Negative Rho implies dissimilarity in neighboring areas.
Working paper and presentation is online: http: //giwiganz. com/garen/NARSC 07 Garen Evans gevans@ext. msstate. edu 662 -325 -2750
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