Abstract
Cost-function analysis of hospitals has been criticized for not including severity adjustments. We tested a scalar hospital-specific severity index, derived from Admission MedisGroup Scores. Alternative versions (i.e., linear/nonlinear) of the index were evaluated by estimating cost functions on a sample of 201 Pennsylvania hospitals. The scalar index was a strong predictor of costs. The results also suggest that the omission of a severity variable in a hospital cost function may cause a specification error.
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Rosko, M.D., Carpenter, C.E. Development of a scalar hospital-specific severity of illness measure. J Med Syst 17, 25–36 (1993). https://doi.org/10.1007/BF01000584
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DOI: https://doi.org/10.1007/BF01000584