Dirichlet-Multinomial Regression

In this paper we provide a Random-Utility based derivation of the Dirichlet-Multinomial regression and posit it as a convenient alternative for dealing with overdispersed multinomial data. We show that this model is a natural extension of McFadden's conditional logit for grouped data and show how it relates with count models. Finally, we use a data set on patient choice of hospitals to illustrate an application of the Dirichlet-Multinomial regression.dirichlet-multinomial, grouped conditional logit, hospital choice, overdispersion

Exit from the Hospital Industry

We study the exit of hospitals from the market for inpatient services. More generous hospital reimbursement significantly reduces the probability of exit throughout the 1990s. Conditional on reimbursement levels, hospital efficiency was not a significant determinant in the early 1990s but in the mid- to late 1990s, less efficient hospitals were significantly more likely to exit. Throughout the period, high-tech services increased the probability of survival, and for-profit hospitals were more likely to exit. The role of Medicare as a determinant of exit became less important in the latter half of the 1990s.Hospital Industry, Managed Care, Exit, Inpatient Services, Technology.

The impact of NFL kickoff rule changes on player injuries: Forgoing excitement to reduce injuries?

Recognizing the increased danger during kickoff returns, the National Football League and National Collegiate Athletic Association changed rules aimed to reduce player injuries. Using a two-stage model, we examined the impact of rule changes on kickoff returns to the rate of player injuries. We estimated the impact of the changes on the number of kickoff returns using a difference-in-difference approach; from these estimates we created an instrumental variable measuring the local average treatment effect of the NFL rule change on player injuries. Our findings suggest that moving the kickoff location decreased both the likelihood of kickoff returns and player injuries

Do Hospitals Cross-Subsidize?

Despite its salience as a regulatory tool to ensure the delivery of unprofitable medical services, cross-subsidization of services within hospital systems has been notoriously difficult to detect and quantify. We use repeated shocks to a profitable service in the market for hospital-based medical care to test for cross-subsidization of unprofitable services. Using patient-level data from general short-term hospitals in Arizona and Colorado before and after entry by cardiac specialty hospitals, we study how incumbent hospitals adjusted their provision of three uncontested services that are widely considered to be unprofitable. We estimate that the hospitals most exposed to entry reduced their provision of psychiatric, substance-abuse, and trauma care services at a rate of about one uncontested-service admission for every four cardiac admissions they stood to lose. Although entry by single-specialty hospitals may adversely affect the provision of unprofitable uncontested services, these findings warrant further evaluation of service-line cross-subsidization as a means to finance them

Exit from the Hospital Industry

We study the exit of hospitals from the market for inpatient services. More generous hospital reimbursement significantly reduces the probability of exit throughout the 1990s. Conditional on reimbursement levels, hospital efficiency was not a significant determinant in the early 1990s but in the mid- to late 1990s, less efficient hospitals were significantly more likely to exit. Throughout the period, high-tech services increased the probability of survival, and for-profit hospitals were more likely to exit. The role of Medicare as a determinant of exit became less important in the latter half of the 1990s

How Nursing Affects Medicare’s Outcome-Based Hospital Payments

Improving value is one of the central aims of recent and ongoing health care reform. In our last LDI/INQRI Brief, we reviewed the evidence of the role of nurses in increasing the value of health care. In this companion brief, we dig deeper into the three reimbursement strategies that Medicare uses to align hospital financial incentives with quality of care, and we calculate the potential effects of nursing-sensitive quality indicators on hospital payments

Do Hospitals Cross Subsidize?

Cross-subsidies are often considered the principal mechanism through which hospitals provide unprofitable care. Yet, hospitals’ reliance on and extent of cross-subsidization are difficult to establish. We exploit entry by cardiac specialty hospitals as an exogenous shock to incumbent hospitals’ profitability and in turn to their ability to cross-subsidize unprofitable services. Using patient-level data from general short-term hospitals in Arizona and Colorado before and after entry, we find that the hospitals most exposed to entry reduced their provision of services considered to be unprofitable (psychiatric, substance- abuse, and trauma care) and expanded their admissions for neurosurgery, a highly profitable service.

Management practices and the quality of care in cardiac units

Importance:- To improve the quality of health care, many researchers have suggested that health care institutions adopt management approaches that have been successful in the manufacturing and technology sectors. However, relatively little information exists about how these practices are disseminated in hospitals and whether they are associated with better performance. Objectives:- To describe the variation in management practices among a large sample of hospital cardiac care units; assess association of these practices with processes of care, readmissions, and mortality for patients with acute myocardial infarction (AMI); and suggest specific directions for the testing and dissemination of health care management approaches. Design:- We adapted an approach used to measure management and organizational practices in manufacturing to collect management data on cardiac units. We scored performance in 18 practices using the following 4 dimensions: standardizing care, tracking of key performance indicators, setting targets, and incentivizing employees. We used multivariate analyses to assess the relationship of management practices with process-of-care measures, 30-day risk-adjusted mortality, and 30-day readmissions for acute myocardial infarction (AMI). Setting:- Cardiac units in US hospitals. Participants_ Five hundred ninety-seven cardiac units, representing 51.5% of hospitals with interventional cardiac catheterization laboratories and at least 25 annual AMI discharges. Main Outcome Measures:- Process-of-care measures, 30-day risk-adjusted mortality, and 30-day readmissions for AMI. Results:- We found a wide distribution in management practices, with fewer than 20% of hospitals scoring a 4 or a 5 (best practice) on more than 9 measures. In multivariate analyses, management practices were significantly correlated with mortality (P = .01) and 6 of 6 process measures (P < .05). No statistically significant association was found between management and 30-day readmissions. Conclusions and Relevance:- The use of management practices adopted from manufacturing sectors is associated with higher process-of-care measures and lower 30-day AMI mortality. Given the wide differences in management practices across hospitals, dissemination of these practices may be beneficial in achieving high-quality outcomes. Interest in quality improvement in health care during the past 10 years has been associated with a handful of important successes.1- 3 However, improvements in the quality of care have been slower than many would have hoped for,4- 8 and quality is still highly variable across organizations.9 Although significant effort has been focused on the use of evidence-based medicine—clinical practices that lead to better care—an interest in organizational strategies and management practices that enable and incentivize high-quality health care is emerging.10- 15 One of the most active areas of interest is in the use of management practices with origins in manufacturing, including, for example, “Lean” methodologies developed at Toyota16 or the use of balanced scorecard approaches that originated in the technology sector.17 These management approaches can be characterized as a set of formalized tools, the use of which is intended to improve quality through multiple pathways, such as eliminating inefficient and variable practices; engaging providers in a collaborative, team-based approach; and structuring mechanisms for setting targets and tracking progress. However, the evidence on the potential effectiveness of these approaches in health care is relatively weak13,18 and consists primarily of single-site studies.19- 21 To address this gap in knowledge, we present a new framework and instrument for defining key management dimensions and for measuring them on a large scale in health care organizations. We describe the variation in management practices among a large sample of hospitals; assess its association with processes of care, readmissions, and mortality for patients with acute myocardial infarction (AMI); and suggest specific directions for the testing and dissemination of health care management approaches