Abstract

The purpose of this paper is to shed light on the ongoing Dutch health system reforms and identify whether hospital costs and hospital outcomes have changed over time. We present an empirical analysis that is based on granular micro-costing data and focuses on conditions for which mortality is indicative of outcome quality, that is, acute myocardial infarction (AMI), chronic heart failure (CHF), and pneumonia (PNE). We deploy a dataset of more than 80,000 inpatient episodes over 5 years (2013-2017) to estimate regression models that control for variation between patients and hospitals. We have three main findings. First, our results do not indicate significant outcome improvements over the years; that is, there is no time trend for mortality. Second, there is heterogeneity in cost developments: for patients who survive their inpatient stay, our data indicate that costs increase significantly by 0.9% per year for AMI patients, while costs decrease significantly by 1.7% per year for CHF patients and by 1.9% per year for PNE patients. For patients who pass away during their inpatient stay, our data do not indicate significant time trends. Third and finally, our results suggest the existence of substantial cost variation between hospitals.