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Hospital multifactor productivity: a presentation and analysis of two methodologies.

Cylus JD, Dickensheets BA - Health Care Financ Rev (2007-2008 Winter)

Bottom Line: In response to recent discussions regarding the ability of hospitals to achieve gains in productivity, we present two methodologies that attempt to measure multifactor productivity (MFP) in the hospital sector.We analyze each method and conclude that the inconsistencies in their outcomes make it difficult to estimate a precise level of MFP that hospitals have historically achieved.Our goal in developing two methodologies is to inform the debate surrounding the ability of hospitals to achieve gains in MFP, as well as to highlight some of the challenges that exist in measuring hospital MFP.

View Article: PubMed Central - PubMed

Affiliation: Office of the Actuary (OACT), Centers for Medicare & Medicaid Services, Baltimore, MD 21244-1850, USA. Jonathan.Cylus@cms.hhs.gov

ABSTRACT
In response to recent discussions regarding the ability of hospitals to achieve gains in productivity, we present two methodologies that attempt to measure multifactor productivity (MFP) in the hospital sector. We analyze each method and conclude that the inconsistencies in their outcomes make it difficult to estimate a precise level of MFP that hospitals have historically achieved. Our goal in developing two methodologies is to inform the debate surrounding the ability of hospitals to achieve gains in MFP, as well as to highlight some of the challenges that exist in measuring hospital MFP.

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10-Year Moving Average Percent Change in Hospital Multifactor Productivity (MFP) for Method 1 and Sensitivity 1: 1990-2005
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f4-hcfr-29-2-049: 10-Year Moving Average Percent Change in Hospital Multifactor Productivity (MFP) for Method 1 and Sensitivity 1: 1990-2005

Mentions: The resulting annual MFP calculation from Sensitivity 1 trends very closely to the original Method 1 MFP. The correlation coefficient between the original Method 1 and the sensitivity analysis is highly positive at 0.94 (Figure 3). From 2001-2005, the most recent 5-year period for which data are available, the average annual hospital MFP in Sensitivity 1 was -0.3 percent compared to 0.1 percent in the original Method 1. The 10-year moving average MFP in Sensitivity 1 was 0.1 percent in 2005 and 0.3 percent in the original Method 1 (Table 1). The 10-year moving average over the entire period was equal to -0.5 percent, which is less than the -0.2 percent calculated using the original method (Figure 4). These results are similar and indicate that the assumptions made in Method 1 do not have a material effect on hospital MFP.


Hospital multifactor productivity: a presentation and analysis of two methodologies.

Cylus JD, Dickensheets BA - Health Care Financ Rev (2007-2008 Winter)

10-Year Moving Average Percent Change in Hospital Multifactor Productivity (MFP) for Method 1 and Sensitivity 1: 1990-2005
© Copyright Policy
Related In: Results  -  Collection

Show All Figures
getmorefigures.php?uid=PMC4195020&req=5

f4-hcfr-29-2-049: 10-Year Moving Average Percent Change in Hospital Multifactor Productivity (MFP) for Method 1 and Sensitivity 1: 1990-2005
Mentions: The resulting annual MFP calculation from Sensitivity 1 trends very closely to the original Method 1 MFP. The correlation coefficient between the original Method 1 and the sensitivity analysis is highly positive at 0.94 (Figure 3). From 2001-2005, the most recent 5-year period for which data are available, the average annual hospital MFP in Sensitivity 1 was -0.3 percent compared to 0.1 percent in the original Method 1. The 10-year moving average MFP in Sensitivity 1 was 0.1 percent in 2005 and 0.3 percent in the original Method 1 (Table 1). The 10-year moving average over the entire period was equal to -0.5 percent, which is less than the -0.2 percent calculated using the original method (Figure 4). These results are similar and indicate that the assumptions made in Method 1 do not have a material effect on hospital MFP.

Bottom Line: In response to recent discussions regarding the ability of hospitals to achieve gains in productivity, we present two methodologies that attempt to measure multifactor productivity (MFP) in the hospital sector.We analyze each method and conclude that the inconsistencies in their outcomes make it difficult to estimate a precise level of MFP that hospitals have historically achieved.Our goal in developing two methodologies is to inform the debate surrounding the ability of hospitals to achieve gains in MFP, as well as to highlight some of the challenges that exist in measuring hospital MFP.

View Article: PubMed Central - PubMed

Affiliation: Office of the Actuary (OACT), Centers for Medicare & Medicaid Services, Baltimore, MD 21244-1850, USA. Jonathan.Cylus@cms.hhs.gov

ABSTRACT
In response to recent discussions regarding the ability of hospitals to achieve gains in productivity, we present two methodologies that attempt to measure multifactor productivity (MFP) in the hospital sector. We analyze each method and conclude that the inconsistencies in their outcomes make it difficult to estimate a precise level of MFP that hospitals have historically achieved. Our goal in developing two methodologies is to inform the debate surrounding the ability of hospitals to achieve gains in MFP, as well as to highlight some of the challenges that exist in measuring hospital MFP.

Show MeSH