Measuring Drug Risks with VaR : a Contribution for the Portuguese Public Private Partnerships Hospitals

• Main Author: Arif, Wafa
• Format: Dissertation
• Language: English
• Published: ProQuest Dissertations & Theses 01-01-2012
• Subjects: Agreements; Budgets; Civil engineering; Construction; Cost analysis; Decision making; Default; Drugs; Economics; Engineering; European Studies; Evolution; Evolution & development; Evolution and Development; Facilities management; Health care expenditures; Health care management; Health care policy; Health insurance; Health services; Hospitals; Infrastructure; Innovations; Management; Medicine; Monte Carlo simulation; Present value; Prices; Public policy; Public private partnerships; Regional Studies; Reimbursement; Risk sharing
• ISBN: 9798496573702

The aim of this work is to forecast the aggregate expenditure on medicines at the hospital level under the National Health Service (NHS) and thereby, compute the risk (expenditure on medicine consumption to the hospital) through a Value at Risk (VaR) analysis. The expenditure on medicines at the hospital level has been forecasted, by using the data available about the public hospitals under the NHS to get estimates of the variance in the expenditure on medicines used by hospitals. From the results obtained for the risk involved in the public hospitals under the NHS, an insight to the 1st wave hospitals under Public Private Partnerships has been provided in order to tackle the technological risk on medicine consumption. We call this expenditure on consumption of medicines as drugs risk.An ordinary least square regression has been used to forecast the expenditure on medicines in the hospitals under the NHS. For the purpose of forecasting, three models have been tested. The residuals then obtained from the regressions have been used to compute risk through VaR analysis.This work concludes that public hospitals, regarding drug risks, do not suffer from very high VaR. To what extent do the hospitals under the 1st wave Public Private Partnerships model suffer from technological risk is still a question to answer, to compute the risk for such hospitals more information about the medicine consumption is necessary.As the hospitals under Public Private Partnerships in Portugal are very recent, no information or data about such hospitals is available. Only data for the public hospitals under the NHS are available, therefore the conclusions pertaining to the Public Private Partnerships are limited.