Supplier-induced demand for psychiatric admissions in Northern New England

Abstract

BackgroundThe development of hospital service areas (HSAs) using small area analysis has been useful in examining variation in medical and surgical care; however, the techniques of small area analysis are underdeveloped in understanding psychiatric admission rates. We sought to develop these techniques in order to understand the relationship between psychiatric bed supply and admission rates in Northern New England. Our primary hypotheses were that there would be substantial variation in psychiatric admission across geographic settings and that bed availability would be positively correlated with admission rates, reflecting a supplier-induced demand phenomenon. Our secondary hypothesis was that the construction of psychiatric HSAs (PHSAs) would yield more meaningful results than the use of existing general medical hospital service areas.MethodsTo address our hypotheses, we followed a four-step analytic process: 1) we used small area analytic techniques to define our PHSAs, 2) we calculated the localization index for PHSAs and compared that to the localization index for general medical HSAs, 3) we used the number of psychiatric hospital beds, the number of psychiatric admissions, and census data to calculate population-based bed-supply and psychiatric admission rates for each PHSA, and 4) we correlated population-based admission rates to population-based psychiatric bed supply.ResultsThe admission rate for psychiatric diagnosis varied considerably among the PHSAs, with rates varying from 2.4 per 100,000 in Portsmouth, NH to 13.4 per 100,000 in Augusta, ME. There was a positive correlation of 0.71 between a PHSA's supply of beds and admission rate. Using our PSHAs produced a substantially higher localization index than using general medical hospital services areas (0.69 vs. 0.23), meaning that our model correctly predicted geographic utilization at three times the rate of the existing model.ConclusionsThe positive correlation between admission and bed supply suggests that psychiatric bed availability may partially explain the variation in admission rates. Development of PHSAs, rather than relying on the use of established general medical HSAs, improves the relevance and accuracy of small area analysis in understanding mental health services utilization.

Improving the performance of social health insurance system through increasing outpatient expenditure reimbursement ratio: a quasi-experimental evaluation study from rural China

“…This policy recommendation is also supported by numerous previous studies. For example, Mathew Mercuri, et al found that, although it is not debatable that physicians can be an important source of variations (using no health services, outpatient care or hospitalization services) in health care services utilization [ 18 , 41 ], physician-related factors are of lesser importance compared to other factors, explaining only 1% of the variance in hospital admission rates, 2% of the variance in overall resource use (2%), and 7% of the variance in overall laboratory costs [ 41 ]. The demand for outpatient care is quite responsive to economic factors, contrary to conventional beliefs about medical care [ 42 ].…”

Is universal and uniform health insurance better for China? Evidence from the perspective of supply-induced demand

“…SID is not unique to China; it occurs globally. Despite some scepticism about the objective existence of SID (Grytten and Sørensen, 2001;Madden et al, 2005), most researchers assert that it is prevalent (such as Watts et al, 2011;Hitoshi and Fushimi, 2014). Asymmetric information is universally acknowledged as being largely responsible for SID, and scholars have carried out many theoretical analyses and empirical studies in this domain.…”

“…Even if there are some new patients with chronic conditions who have less knowledge and who suddenly become aware of the severity of the condition, they would not constitute the majority of inpatients. This approach is similar to that adopted in a recent study of moral hazard and SID based on Dutch GP utilisation (Dijk et al ., 2013), and it provides a relatively new way to take advantage of different data and a novel approach to analysing the problem, in contrast to many existing studies that study the existence of SID by testing the dynamics of supply and demand (Watts et al ., 2011; Li et al ., 2014). Our main aim is to test the impact of the different schemes with different benefit levels when the degree of information asymmetry changes.…”

Geographical Variation in Psychiatric Admissions Among Recipients of Public Assistance

“…Similar to our results, some previous studies in smaller areas found significant geographical variations in the numbers of psychiatric admission. 29 – 32 For example, Watts et al found a 6-fold variation in the psychiatric admission rate by hospital service area in Northern New England. 29 Fortney et al also found a substantial geographic variation in the county-level hospitalization rate for schizophrenia in 14 states of the United States.…”

“…29 – 32 For example, Watts et al found a 6-fold variation in the psychiatric admission rate by hospital service area in Northern New England. 29 Fortney et al also found a substantial geographic variation in the county-level hospitalization rate for schizophrenia in 14 states of the United States. 30 Our study is unique as it focused on recipients of public assistance in all of Japan.…”