Rankings of Unwarranted Variation in Healthcare Treatments

Abstract

In this paper, we introduce a framework designed to identify and rank possible unwarranted variation of treatments in healthcare. The innovative aspect of this framework is a ranking procedure that aims to identify healthcare institutions where unwarranted variation is most severe, and diagnosis treatment combinations which appear to be the most sensitive to unwarranted variation. By adding a ranking procedure to our framework, we have taken our research a step beyond the existing literature. This ranking procedure is intended to assist health insurance companies in their search for violations, and to help find them more quickly, enabling more effective corrective and preventive actions on behalf of the healthcare institutions concerned.

Keywords: Unwarranted variation, Practice variation, Upcoding, Diagnosis-related group, Healthcare data, Health insurance

JEL Classification: I130