Thesis Thursday: Francesco Longo

On the third Thursday of every month, we speak to a recent graduate about their thesis and their studies. This month’s guest is Dr Francesco Longo who has a PhD from the University of York. If you would like to suggest a candidate for an upcoming Thesis Thursday, get in touch.

Title
Essays on hospital performance in England
Supervisor
Luigi Siciliani
Repository link
http://etheses.whiterose.ac.uk/18975/

What do you mean by ‘hospital performance’, and how is it measured?

The concept of performance in the healthcare sector covers a number of dimensions including responsiveness, affordability, accessibility, quality, and efficiency. A PhD does not normally provide enough time to investigate all these aspects and, hence, my thesis mostly focuses on quality and efficiency in the hospital sector. The concept of quality or efficiency of a hospital is also surprisingly broad and, as a consequence, perfect quality and efficiency measures do not exist. For example, mortality and readmissions are good clinical quality measures but the majority of hospital patients do not die and are not readmitted. How well does the hospital treat these patients? Similarly for efficiency: knowing that a hospital is more efficient because it now has lower costs is essential, but how is that hospital actually reducing costs? My thesis tries to answer also these questions by analysing various quality and efficiency indicators. For example, Chapter 3 uses quality measures such as overall and condition-specific mortality, overall readmissions, and patient-reported outcomes for hip replacement. It also uses efficiency indicators such as bed occupancy, cancelled elective operations, and cost indexes. Chapter 4 analyses additional efficiency indicators, such as admissions per bed, the proportion of day cases, and proportion of untouched meals.

You dedicated a lot of effort to comparing specialist and general hospitals. Why is this important?

The first part of my thesis focuses on specialisation, i.e. an organisational form which is supposed to generate greater efficiency, quality, and responsiveness but not necessarily lower costs. Some evidence from the US suggests that orthopaedic and surgical hospitals had 20 percent higher inpatient costs because of, for example, higher staffing levels and better quality of care. In the English NHS, specialist hospitals play an important role because they deliver high proportions of specialised services, commonly low-volume but high-cost treatments for patients with complex and rare conditions. Specialist hospitals, therefore, allow the achievement of a critical mass of clinical expertise to ensure patients receive specialised treatments that produce better health outcomes. More precisely, my thesis focuses on specialist orthopaedic hospitals which, for instance, provide 90% of bone and soft tissue sarcomas surgeries, and 50% of scoliosis treatments. It is therefore important to investigate the financial viability of specialist orthopaedic hospitals relative to general hospitals that undertake similar activities, under the current payment system. The thesis implements weighted least square regressions to compare profit margins between specialist and general hospitals. Specialist orthopaedic hospitals are found to have lower profit margins, which are explained by patient characteristics such as age and severity. This means that, under the current payment system, providers that generally attract more complex patients such as specialist orthopaedic hospitals may be financially disadvantaged.

In what way is your analysis of competition in the NHS distinct from that of previous studies?

The second part of my thesis investigates the effect of competition on quality and efficiency under two different perspectives. First, it explores whether under competitive pressures neighbouring hospitals strategically interact in quality and efficiency, i.e. whether a hospital’s quality and efficiency respond to neighbouring hospitals’ quality and efficiency. Previous studies on English hospitals analyse strategic interactions only in quality and they employ cross-sectional spatial econometric models. Instead, my thesis uses panel spatial econometric models and a cross-sectional IV model in order to make causal statements about the existence of strategic interactions among rival hospitals. Second, the thesis examines the direct effect of hospital competition on efficiency. The previous empirical literature has studied this topic by focusing on two measures of efficiency such as unit costs and length of stay measured at the aggregate level or for a specific procedure (hip and knee replacement). My thesis provides a richer analysis by examining a wider range of efficiency dimensions. It combines a difference-in-difference strategy, commonly used in the literature, with Seemingly Unrelated Regression models to estimate the effect of competition on efficiency and enhance the precision of the estimates. Moreover, the thesis tests whether the effect of competition varies for more or less efficient hospitals using an unconditional quantile regression approach.

Where should researchers turn next to help policymakers understand hospital performance?

Hospitals are complex organisations and the idea of performance within this context is multifaceted. Even when we focus on a single performance dimension such as quality or efficiency, it is difficult to identify a measure that could work as a comprehensive proxy. It is therefore important to decompose as much as possible the analysis by exploring indicators capturing complementary aspects of the performance dimension of interest. This practice is likely to generate findings that are readily interpretable by policymakers. For instance, some results from my thesis suggest that hospital competition improves efficiency by reducing admissions per bed. Such an effect is driven by a reduction in the number of beds rather than an increase in the number of admissions. In addition, competition improves efficiency by pushing hospitals to increase the proportion of day cases. These findings may help to explain why other studies in the literature find that competition decreases length of stay: hospitals may replace elective patients, who occupy hospital beds for one or more nights, with day case patients, who are instead likely to be discharged the same day of admission.

Chris Sampson’s journal round-up for 29th May 2017

Every Monday our authors provide a round-up of some of the most recently published peer reviewed articles from the field. We don’t cover everything, or even what’s most important – just a few papers that have interested the author. Visit our Resources page for links to more journals or follow the HealthEconBot. If you’d like to write one of our weekly journal round-ups, get in touch.

“Naming and framing”: The impact of labeling on health state values for multiple sclerosis. Medical Decision Making [PubMedPublished 21st May 2017

Tell someone that the health state that they’re valuing is actually related to cancer, and they’ll give you a different value than if you hadn’t mentioned cancer. A lower value, probably. There’s a growing amount of evidence that ‘labelling’ health state descriptions with the name of a particular disease can influence the resulting values. Generally, the evidence is that mentioning the disease will lower values, though that’s probably because researchers have been selecting diseases that they think will show this. (Has anyone tried it for hayfever?) The jury is out on whether labelling is a good thing or a bad thing, so in the meantime, we need evidence for particular diseases to help us understand what’s going on. This study looks at MS. Two UK-representative samples (n = 1576; n = 1641) completed an online TTO valuation task for states defined using the condition-specific preference-based MSIS-8D. Participants were first asked to complete the MSIS-8D to provide their own health state, and then to rank three MSIS-8D states and also complete a practice TTO task. For the preference elicitation proper, individuals were presented with a set of 5 MSIS-8D health states. One group were asked to imagine that they had MS and were provided with some information and a link to the NHS Choices website. The authors’ first analysis tests for a difference due to labelling. Their second analysis creates two alternative tariffs for the MSIS-8D based on the two surveys. People in the label group reported lower health state values on average. The size of this labelling-related decrement was greater for less severe health states. The creation of the tariffs seemed to show that labelling does not have a consistent impact across dimensions. This means that, in practice, the two tariffs could favour different types of interventions, depending on for which dimensions benefits might be observed. The tariff derived from the label group demonstrated slightly poorer predictive performance. This study tells us that label-or-not is a decision that will influence the relative cost-effectiveness of interventions for MS. But we still need a sound basis for making that choice.

Nudges in a post-truth world. Journal of Medical Ethics [PubMed] Published 19th May 2017

Not everyone likes the idea of nudges. They can be used to get people to behave in ways that are ‘better’… but who decides what is better? Truth, surely, we can all agree, is better. There are strong forces against the truth, whether they be our own cognitive biases, the mainstream media (FAKE NEWS!!!), or Nutella trying to tell us they offer a healthy breakfast option thanks to all that calcium. In this essay, the author outlines a special kind of nudge, which he refers to as a ‘nudge to reason’. The paper starts with a summary of the evidence regarding the failure of people to change their minds in response to evidence, and the backfire effect, whereby false beliefs become even more entrenched in light of conflicting evidence. Memory failures, and the ease with which people can handle the information, are identified as key reasons for perverse responses to evidence. The author then goes on to look at the evidence in relation to the conditions in which people do respond to evidence. In particular, where people get their evidence matters (we still trust academics, right?). The persuasiveness of evidence can be influenced by the way it is delivered. So why not nudge towards the truth? The author focuses on a key objection to nudges; that they do not protect freedom in a substantive sense because they bypass people’s capacities for deliberation. Nudges take advantage of non-rational features of human nature and fail to treat people as autonomous agents deserving of respect. One of the reasons I’ve never much like nudges is that they could promote ignorance and reinforce biases. Nudges to reason, on the other hand, influence behaviour indirectly via beliefs: changing behaviour by changing minds by improving responses to genuine evidence. The author argues that nudges to reason do not bypass the deliberative capacities of agents at all, but rather appeal to them, and are thus permissible. They operate by appealing to mechanisms that are partially constitutive of rationality and this is itself part of what defines our substantive freedom. We could also extend this to argue that we have a moral responsibility to frame arguments in a way that is truth-conducive, in order to show respect to individuals. I think health economists are in a great position to contribute to these debates. Our subfield exists principally because of uncertainty and asymmetry of information in health care. We’ve been studying these things for years. I’m convinced by the author’s arguments about the permissibility of nudges to reason. But they’d probably make for flaccid public policy. Nudges to reason would surely be dominated by nudges to ignorance. Either people need coercing towards the truth or those nudges to ignorance need to be shut down.

How should hospital reimbursement be refined to support concentration of complex care services? Health Economics [PubMed] Published 19th May 2017

Treating rare and complex conditions in specialist centres may be good for patients. We might expect these patients to be especially expensive to treat compared with people treated in general hospitals. Therefore, unless reimbursement mechanisms are able to account for this, specialist hospitals will be financially disadvantaged and concentration might not be sustainable. Healthcare Resource Groups (HRGs) – the basis for current payments – only work if variation in cost is not related to any differences in the types of patients treated at particular hospitals. This study looks at hospitals that might be at risk of financial disadvantage due to differences in casemix complexity. Individual-level Hospital Episode Statistics for 2013-14 were matched to hospital-level Reference Costs and a set of indicators for the use of specialist services were applied. The data included 12.4 million patients of whom 766,204 received complex care. The authors construct a random effects model estimating the cost difference associated with complex care, by modelling the impact of a set of complex care markers on individual-level cost estimates. The Gini coefficient is estimated to look at the concentration of complex care across hospitals. Most of the complex care markers were associated with significantly higher costs. 26 of 69 types of complex care were associated with costs more than 10% higher. What’s more, complex care was concentrated among relatively few hospitals with a mean Gini coefficient of 0.88. Two possible approaches to fixing the payment system are considered: i) recalculation of the HRG price to include a top-up or ii) a more complex refinement of the allocation of patients to different HRGs. The second option becomes less attractive as more HRGs are subject to this refinement as we could end up with just one hospital reporting all of the activity for a particular HRG. Based on the expected impact of these differences – in view of the size of the cost difference and the extent of distribution across different HRGs and hospitals – the authors are able to make recommendations about which HRGs might require refinement. The study also hints at an interesting challenge. Some of the complex care services were associated with lower costs where care was concentrated in very few centres, suggesting that concentration could give rise to cost savings. This could imply that some HRGs may need refining downwards with complexity, which feels a bit counterintuitive. My only criticism of the paper? The references include at least 3 web pages that are no longer there. Please use WebCite, people!

Credits