HERO Online Working Paper Series,
University of Oslo, Health Economics Research Programme

Abstract: Is an increase in the quality of health services, as perceived by the hospital, appreciated by the consumers? If so, patients should respond positively to an increase in the quality of hospital services. Using two indicators to capture the quality of hospital services I investigate the relationship between these indicators and inpatients’ experiences. The health sector has increased substantially in most OECD countries over the last few decades. In Norway, total health care expenditures as a percentage share of the GDP, has grown from 2.9 % in 1960 to 8.7 % in 2002. In 2002 the state took over ownership of the Norwegian hospital sector and organized it through five regional semiautonomous companies. The motivation behind this was more efficient use of hospital resources, equal access despite geographical differences, and a higher quality of health services. Cost efficiency, measured as total activity relative to total costs, decreased during the 1990s. Part of the decrease can be explained by increased labour costs. It is often assumed that decreasing costs lead to lower quality. If this is the case in the health sector, one would expect to see a higher level of quality when costs per patient increase. Health services are paid for by taxpayers who are also the users of these services. For this reason, and especially since costs have increased, they should be able to evaluate the quality of the services they receive. This leads to an important question: What aspects of quality are important to consumers of health services? Do quality indicators, such as readmission rates and waiting time, capture the quality that consumers demand? This thesis is an attempt to answer these questions. The method I use is standard OLS. I also investigate possible cross-effects between hospitals’ readmission rates and age and look at the effect of a one standard deviation change in four of the explanatory variables. I also consider the use of an alternative estimation method that allows for stronger correlation between patients within hospitals but assumes independence between patients at different hospitals. The estimations are done using the statistical package StataSE 8. Using a simple regression model I have investigated the relationship between patients’ experiences during a hospital admission and the readmission rate and mean waiting time at the hospital they were admitted to. The data on these two hospital specific variables iii were provided by SINTEF Health who runs the Norwegian Patient Register. The register is owned by the Directorate of Health and Social Affairs. The data on patient satisfaction with hospital services were taken from an anonymous survey among patients admitted to somatic hospitals. They received the surveys two to three weeks after discharge. The response rate was approximately 50 %. The questions in the survey concerned issues such as health personnel’s ability to convey and receive relevant information, as well as provide care, treatment, and pain relief. There were also questions on patients’ impression of hospital equipment, general standard, and facilities and sanitary conditions. The survey consisted of 50 questions that I grouped into seven category variables, according to the type of service the different questions concerned. These categories were content, info, info2, facisani, care, org, and improve. Patients were also asked about their gender, age, health status, education level, number of admissions last two years, and whether their first language was Scandinavian. I was thus able to control for these characteristics. My main empirical finding is that hospitals’ readmission rates have a negative and significant effect on inpatients’ experiences. Patients admitted to hospitals with low readmission rates are more content with the care, treatment, and information they receive from hospital personnel. They are also more content with hospital facilities and sanitary conditions and organization of hospital staff. The results for waiting time were more ambiguous. Patients’ impression of hospitals’ facilities and sanitary conditions was better at hospitals with longer waiting time. It may be that other quality aspects are better at these hospitals, and that these other aspects are more important for patient satisfaction. Patients’ age, health status, number of previous admissions, and education level significantly affected their satisfaction with hospital services. The age effect was positive but decreasing. Investigating the cross-effect between age and the readmission rate showed that younger patients respond more negatively to a given readmission rate than older patients. Patient satisfaction decreased with the number of admissions and with patients’ education level but increased with patients’ health status. Patient characteristics explained the main share of the variation in patients’ experiences. Including dummies for hospitals increased the share of variation explained indicating that there are hospital specific factors present that affect patient satisfaction. Of this increase readmissions and waiting time explained a small part. More precise measures of hospital level quality may be needed in order to capture more of this variation.

Keywords: quality; heslth services; hospitals

JEL-codes: I00

53 pages, June 7, 2009

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