Internal markets and health care efficiency: a multiple-output stochastic frontier analysis

Abstract

This paper has two purposes. The first purpose is methodological and aims to extend previous work on efficiency analysis by implementing a multiple-output stochastic ray frontier production function model. This model generalizes the single-output stochastic frontier model to multiple-input, multiple-output technologies and allows simultaneous estimation of technical efficiency and analysis of influential variables on efficiency. The second, empirical, purpose is to test for existence and magnitude of the effect of purchaser/provider split combined with new reimbursement schemes on technical efficiency in the Swedish public hospital system. The analysis is carried out with a panel data set covering the total population of 26 Swedish County Councils from 1989 to 1995. Our empirical results support the frontier model specification and indicate that output-based reimbursement improves technical efficiency. The potential saving in costs due to a switch from budget-based allocation to output-based allocation is estimated to be almost 10%.

Activity‐based financing of health care––experiences from Sweden

“…In a study (Gerdtham et al, 1999) covering the period 1989-1995, the trend in productivity was compared for hospitals operating under activity-based financing and hospitals operating under budget frame financing. The study showed that those hospitals operating under activity-based financing increased their productivity more than the hospitals in the control group.…”

Assessing the Queuing Process Using Data Envelopment Analysis: an Application in Health Centres

“…Table 1 shows the most commonly used inputs and outputs in previous DEA studies when comparing hospitals. Number of Outpatient visits (Bwana 2015 ;Flokou et al, 2011;Masiye et al, 2006 ;Ramanathan 2005;Zuckerman et al, 1994) Number of beds (Bwana 2015;Kose et al, 2014, Al-Shammari 1999Akazili et al, 2008;Harrison et al, 2004;Puig-Junoy 2000;Weng et al, 2009;Magnussen 1996) Number of Inpatient visits (Chuang et al, 2011;Butler and Li 2005;Tsai and Molinero 2002;Zere et al, 2001;Banker et al, 1986 ;Kawaguchi et al, 2014) Number of doctors (Grosskopf and Valdmanis 1987;Kirigia et al, 2008;Chang et al, 2004;Huang et al, 1989;Prior 2006;Kose et al, 2014;Dotoli et al, 2015) Number of major and minor surgeries (Al-Shammari 1999;Chang et al, 2004 ;Puig-Junoy 2000 ;Gerdtham et al, 1999 ;Dotoli et al, 2015) Number of nurses (Chuang et al, 2011;Masiye et al, 2006;Hollingsworth and Parkin 1997;Byrnes and Valdmanis 1993;Kawaguchi et al, 2014) Number of emergency visits (Butler andLi 2005 Grosskopf andValdmanis 1987;<...>…”

The impact of TennCare on hospital efficiency

“…Previous studies of hospital inefficiency have also examined the effects of external changes in market and regulatory environments such as the implementation of the prospective payment system (PPS) in 1983 [26,32], the growth and penetration of managed care [30,33], and government budget and health care reforms [34,35]. In response to the growing concern over health care quality in the late 1990s and early 2000s, many researchers have also focused on the effects of financial pressure placed on hospitals as a result of PPS payments and penetration of HMOs in local hospital markets on both the level of technical efficiency and quality of care in hospitals [35,36].…”