Measures of health status and prior service use have been considered promising predictors of future health expenditures, particularly when used for risk-adjustment models in capitation payment systems. While the use of health status as a future predictor has its difficulty in terms of measurement accuracy and implementation costs, using prior utilization as the base for the calculation of future health expenditures also has its concerns. Based on a three-stage cross-lagged model in a longitudinal study design, this study showed that prior utilization has both a direct and an indirect effect on subsequent utilization. However, the real net effect of prior utilization on subsequent utilization can be overestimated by 25%, if the effect of health status is not taken into account.
Chern, J.-Y., Rossiter, L.F. and Wan, T.T.H. (2000), "Examining the real effect of prior utilization on subsequent utilization", Jacobs Kronenfeld, J. (Ed.) Health Care Providers, Institutions, and Patients: Changing Patterns of Care Provision and Care Delivery (Research in the Sociology of Health Care, Vol. 17), Emerald Group Publishing Limited, Leeds, pp. 237-249. https://doi.org/10.1016/S0275-4959(00)80048-4
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