A flow demand model to predict hospital utilisation

Context and objectives: The definition of hospital policies to improve geographic equity requires information regarding the impact of changes of hospital supply on hospital utilisation. Previous models to predict hospital utilisation have been particularly weak in three respects: in capturing the process of demand for hospital care, in modelling the interaction between hospital utilisation and the supply of alternative hospitals, and in dealing with geographic variations. This study proposes an alternative model to predict demand and utilisation of hospital care at the small area level. Method: The proposed approach departs from an alternative unit of analysis, namely utilisation flows of hospital care between population and hospital points. It has built a flow demand model that: a) Relates flow demand with utilisation flows; b) Models the interaction between hospital supply and utilisation of alternative hospitals with the use of an index of alternative hospital supply and; c) Captures the process of demand for hospital care, with special attention to the role of other health care sectors and to the organisational and institutional context of the hospital system. The model is built on the basis of the Portuguese health care system, though it can be also applied to the context of other countries with a NHS structure. A two-part econometric model appears to be suitable to estimate the flow demand model for prediction purposes: it deals with the matrix structure of flow data, and it allows for interpretation of the geographic decision on hospital use. When the model is applied to the Portuguese health care system, results show that a wide range of factors impact on utilisation, and that primary care utilisation and institutional and supply characteristics of the hospital system are key elements in formulating hospital policies. Conclusions: The flow demand model is an alternative to previous models and presents good econometric properties. It provides key information for defining future hospital policies at the central level.