Chapter 2

CMS = f(COST, CMP, PL, RC, DM , PMED, AP, DMS, DREG)
Where
CMS = Mean cost per standardized hospitalization
COST = Constant
CMP = Mean cost of personnel
PL = Bed place
RC = Share of hospitalizations with “weight” > 2,5
DM = Mean length of hospitalization
PMED = Discharges per doctor
AP = Quota of non medical personnel
DMS = Dummy specialist organization
DREG = Dummy Sicilia Region
Apart from the productive work factor CMP (which accounts for by far the greatest share
of the costs, as is well known), attention has been given to PL (bed places) and care complexity
as represented by the proxy RC (share of hospitalizations with a weight greater
than 2,5); productivity was considered in terms of the mean length of hospitalization DM
and discharges per doctor PMED and the mix of non medical personnel in the staff.
The equation estimated with a multiple regression model on the data for 2002 and 2003
produced the following results.
Table 2 – Significance of the econometric model
Model R R Squared R Squared Std. Error
corrected of estimate
2002 0,8249 0,6805 0,6485 0,1329
2003 0,8709 0,7584 0,7340 0,1189
The model explains 68,05% of the total variation of the total cost per DRG point in 2002
and 75,84% of it in 2003. All the coefficients are significant, except for hospital size, and
of the expected sign. As to 2003, the Sicilia dummy, which captures the different accounting
source used for the Sicilian hospitals, is significant.
The hypothesis that the system of financing by DRG cannot be directly extended to specialist
organizations finds confirmation in the fact that these cost an average of 13,4%
more. It also emerges that differences in mean cost of personnel constitute a real and
significant reason for differences in hospital costs. Then, there is indirect confirmation
that difference in level of efficiency explains a significant part of the variation in the personnel
variable. Short mean stays and high productivity of medical personnel (we chose
to use output per doctor, but that per nurse is evidently correlated) implies lower costs
per case treated. There seems also to be indirect confirmation of the usefulness of management
policies aimed at increasing productivity 11 . One day less of mean stay in hospital
11 However, it must be remembered that our analysis does not measure the quality of care.
[169]
CEIS Health Report 2006