Measuring hospital cost efficiency with panel data models

✍ Scribed by Miika Linna

• Publisher: John Wiley and Sons
• Year: 1998
• Tongue: English
• Weight: 127 KB
• Volume: 7
• Category: Article
• ISSN: 1057-9230
• DOI: 10.1002/(sici)1099-1050(199808)7:5<415::aid-hec357>3.0.co;2-9

✦ Synopsis

This paper investigated the development of hospital cost efficiency and productivity in Finland in 1988 -1994 using a comparative application of parametric and non-parametric panel models. Stochastic cost frontier models with a time-varying inefficiency component were used as parametric methods. As non-parametric methods various DEA models were employed to calculate efficiency scores and the Malmquist productivity index.

The results revealed a 3-5% annual average increase in productivity, half of which was due to improvement in cost efficiency and half due to technological change. The results by parametric and non-parametric methods compared well with respect to individual efficiency scores, time-varying efficiency and technological change. The state subsidy reform of 1993 did not seem to have any observable effects on the hospital efficiency.