Regional hospital needs projection: An input-output approach

Abstract

Steeply rising medical costs and the inadequacies of health care for the needy have recently stirred up unprecedented concern over the health industry in this country. In order to achieve more efficient allocation of medical resources and, hence, more equitable distribution of medical services, regional planning and regulatory authorities have been established and periodically reorganized in the health field in this country. This paper develops a systematic input-output model utilizing a clinical approach to project the impatient services needed for a given population by age, sex, residence and medical specialty. On the basis of empirical discharge data, relationships between regional demographic characteristics and diagnoses, between diagnoses and inpatient services, and between inpatient services and the production capacity of hospitals were derived. Given the projected regional population, the coefficients so derived are adjusted and employed to project future inpatient service needs. By comparing the existing to projected capacity, the location and investment decisions for hospitals can then be properly made, and the possibility of resource misallocation may be minimized. The applicability of this model is demonstrated in forecasting the hospital needs in the Kansas City Metropolitan Area, 1975–1995.