EMPIRICAL VERIFICATION OF THE STRUCTURAL MODEL RELATING EQUILIBRIUM VALUES OF COSTS, QUALITY, AND COMFORT OF MEDICAL SERVICES WITH INDIVIDUALIZED ELASTICITIES OF DEMAND

Abstract

The healthcare system in Ukraine is moving to flexible mechanisms to support the quality and comfort of medical services, in particular through the introduction of co-payments. The following necessitates the development of theoretical background and econometric models to support the process evaluation and optimization. Aim. The research aims at performing empirical verification of the structural model relating equilibrium values of costs, quality, and comfort of medical services with individualized elasticities of demand. Material and Methods. We have performed a combined (retrospective + prospective) study of the cases of uterine fibroids and/or ovarian cysts treated surgically in three city gynecological hospitals/centers in Vinnytsia, Ukraine. An econometric model of D. Dranove and M. Satterthwaite was used as the theoretical basis, the one that describes the dynamic equilibrium of cost, quality, and comfort of medical services together with demand elasticities. Importantly, the system of structural equations models joins moves of equilibrium of the price, quality, and comfort of medical services given shifts in the elasticities of demand. This is of use to analyze factors of efficiency and responsiveness to the demand of health care provision. Unfortunately, we did not find any practical use of this promising theoretical model, possibly due to the lack of empirical verification. Results and Disscusion. Therefore, we analyzed 150 case histories of women with uterine fibroids and/or ovarian cysts treated surgically. The data on the costs, quality, and comfort of inpatient care are studied to enable empirical verification of the model. The modern Monte Carlo Markov Chain (МСМС) methods of structural modeling and power analysis were used to estimate the required sample size. Conclussion. As a result of the study, the system of structural equations accompanying the theoretical model has been empirically verified for the first time and proved to be valid for ascertaining rational ways to optimize inpatient servicing of women with given gynecological pathology, in particular through the management of demand elasticities.