What is it about?
The average year-to-year volatility in medicare costs in US States decreases with increasing size (expenditure). Roughly from +/- 20% at $1 million and is still greater than +/- 1% for expenditure above $10,000 million. After adjusting for size, expenditure on dental, hospital and physician costs showed lowest volatility. However volatility associate with drugs, home care, durable products, nursing home and health care assistants were at least 2- to 3-times higher.
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Why is it important?
End of life costs appear to be implicated in the higher volatility in costs seen in particular categories, i.e. nursing home costs, etc. Note that this study reports AVERAGE year to year volatility over a long time series.
Perspectives
Part of a longer series on the inescapable volatility (financial risk) associated with health care costs, see http://www.hcaf.biz/2010/Publications_Full.pdf In the UK, politicians appear to find it easier to blame the NHS for financial 'failure' rather than admit that the intrinsic volatility (risk) is unacceptably high and will ALWAYS generate recurring financial 'failure'. A 4-Part series on Financial and capacity risk in healthcare has been subsequently published in Journal of Health Care Finance, winter 2021 http://www.healthfinancejournal.com/~junland/index.php/johcf/index
Dr Rodney P Jones
Healthcare Analysis & Forecasting
Read the Original
This page is a summary of: Volatile costs in GP commissioning: insights, British Journal of Healthcare Management, December 2012, Mark Allen Group,
DOI: 10.12968/bjhc.2012.18.12.656.
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