Identifying the scope for savings at inpatient episode level: An illustration applying DEA to chronic obstructive pulmonary disease

• Comparison of the costs of COPD episodes using LOS as a surrogate for costs.
• A DEA non-oriented model is used to reflect lower bounds on LOS.
• Results suggest a high potential to reduce costs through reductions in LOS.
• Different savings found between gender within hospitals and between hospitals.
• Consultants also show different potential to reduce LOS.

Chronic obstructive pulmonary disease (COPD) is characterised by a largely irreversible obstruction of the airways, and is one of the leading causes of chronic morbidity and mortality worldwide. This paper illustrates the use of Data Envelopment Analysis (DEA) to assess the potential for cost savings at COPD inpatient episode level. The analysis uses the length of stay of each episode as a surrogate for expenditure on that episode while allowing for the medical condition of the patient and the quality of care received. We find substantial possible reductions in length of stay which would translate to cost savings. The paper also explores differences both between hospitals and between care teams within hospitals so that cost efficient protocols of treatment can be identified and disseminated.