USING A MARKOV REWARD MODEL TO ESTIMATE SPEND-DOWN COSTS FOR A GERIATRIC DEPARTMENT

A Markov model is used to describe movements ol geriatric patients wit hin a hospital system where the states of the Markov chain are acute/r ehabilitative, long-stay care, discharge or death. By assigning costs to the states of this model, we can estimate the spend-down costs of r unning down sen ices given that there are no more admissions and diffe rent costs are assigned to acute/rehabilitative and long-stay care. Th e model is used to estimate the spend-down costs using data previously validated for three Departments of Geriatric Medicine in the South We st Thames Region of England. Our approach allows hospital planners to identify cost-effective strategies which take into account the fact th at some geriatric patients remain in long-stay care for very long peri ods of time.