A Review of the Methods Used to Study Hospital Costs

This paper is a survey of the ways that hospital costs have been measured and analyzed. Section one mentions two problems which face researchers : the inability to measure the hospital's product and data limitations . A classification of costs is introduced for use in later analysis. Section two enumerates the factors most often cited as important in causing the increase in hospital costs over time. Some of the methods that have been used to determine the relative importance of each factor in contributing to the increase in costs are examined. Section three focuses on studies that have analyzed the variation in costs among hospitals. Particular attention is given to two studies in which a new measure of output is constructed. Section four summarizes the results and enumerates suggestions for further research.