State-Level Variations in Hospital Expenditures: An Application of Spatial Regression

Journal of Health Care Finance 42 (1), 2015

50 Pages Posted: 15 Sep 2015 Last revised: 5 Mar 2018

See all articles by Srimoyee Bose

Srimoyee Bose

Georgia State University; West Virginia University, Davis College of Agriculture, Natural Resources & Design, Students

Tesfa Gebremedhin

West Virginia University

Usha Sambamoorthi

West Virginia University

Date Written: September 10, 2015

Abstract

Hospitalizations have reemerged as a priority for the United States healthcare system, policy makers, and research communities, due to their large share of total expenditures and morbidity and mortality burden on patient populations. Estimates of the proportion of total healthcare expenditures due to hospitalizations vary from 30-38%. While there are many reasons for hospitalization, an estimated 25% to 40% of all hospitalizations are for treating alcohol-related complications. Furthermore, it is plausible that the hospital spending in one state can affect the hospital expenditures of the neighboring states because 1) hospital expenditures of one state may be influenced by hospital prices, practices and policies of the neighboring states, and 2) presence of hospital facilities in a Hospital Referral Region (HRR) which serve patients across state lines. Therefore, using a Spatial Durbin Fixed Effect Model, this paper examines the state-level variations in hospital expenditures from 2000 through 2009, extracted from publicly available data files.

Results highlighted that rate of binge drinking, hospitals and beds, unemployment rate, African-Americans, active physicians and state GDP had positive impacts on its neighboring states. Moreover, male population, Hispanics and un-insurance rate had negative impacts on own state’s hospital costs but positive impacts on its bordering states.

Keywords: hospital expenditures, spatial regression, state level, binge drinking

JEL Classification: I100, H750, I180, C23

Suggested Citation

Bose, Srimoyee and Gebremedhin, Tesfa and Sambamoorthi, Usha, State-Level Variations in Hospital Expenditures: An Application of Spatial Regression (September 10, 2015). Journal of Health Care Finance 42 (1), 2015, Available at SSRN: https://ssrn.com/abstract=2658833

Srimoyee Bose (Contact Author)

Georgia State University ( email )

35 Broad Street
Atlanta, GA 30303-3083
United States

West Virginia University, Davis College of Agriculture, Natural Resources & Design, Students ( email )

Morgantown, VA
United States

Tesfa Gebremedhin

West Virginia University ( email )

PO Box 6025
Morgantown, WV 26506
United States

Usha Sambamoorthi

West Virginia University

PO Box 6025
Morgantown, WV 26506
United States

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