However, they do provide a means for measuring the relative magnitude of services and resources utilized. Hospitalizations by Patient's Town of Residence Numbers of avoidable hospitalizations vary by the towns from which patients come. This finding suggests that these communities may be areas to target for improved primary care programs. Economic Costs Avoidable hospitalizations give rise to substantial economic costs, including both direct and indirect costs. Indirect costs, that is the economic productivity losses due to illness, can be a consequence of temporary absences from both work or school, suboptimal performance due to illness on the job, disability, or premature mortality.
Indirect costs vary by disease.
Thus indirect costs can add substantially to the total economic costs associated with diseases. This conversion factor is a weighted average of estimated hospital-specific conversion factors for 1996. The economic burden of illness can be reduced by timely preventive care. These savings take into account the decrease in hospitalizations due to the prevention of bacterial pneumonia. Clearly net savings can be achieved through greater utilization of cost-effective outpatient care rather than inpatient treatment.