Curbing the trend: Estimating Hospital-specific expenditure growth through regional variation

We study variation in individual annual hospital expenditure trends for all hospitals in the Netherlands for the period 2011-2017. The trends reflect the average annual expenditure patterns of all persons living in the Hospital Referral Region for each hospital. This allows us to study which hospitals may achieve expenditure savings compared to a national average expenditure trend. We find large variation in hospitalspecific expenditure trends. The five hospitals with the largest savings show an average regional trend of e24.70, after controlling for regional demographics and socioeconomic status. This is equivalent to a 2.2% annual reduction relative to 2011 per-person expenditure levels. However, we find that hospitals who are able to achieve cost savings relative to the national trend were typically more expensive at the starting period of our analysis. Adjusting for this regression to the mean effect we find that the saving trend of 24.70 euros per person per year diminish to 6.05 euros. Relative to 2011 expenditure levels, this still represents a total expenditure savings of 3.2% over the 6-year period 2011-2017. We find no relation of hospital-expenditure trends to expenditure trends in primary care or other non-hospital care.