The impact of internal markets on health care efficiency: evidence from health care reforms in Sweden
AbstractA purchaser/provider split together with output-based reimbursement were recently introduced by several Swedish county councils. These changes have been motivated by arguments of efficiency and consumer choice. This paper tests the null hypothesis that hospital services are provided as efficiently by county councils with internal markets and output-based reimbursement as by county councils with budget reimbursement. We first estimate technical efficiency using data envelopment analysis and then we regress the efficiency scores as the dependent variable on new internal organizations in a multiple regression by use of pooled cross-section data for the 26 county councils for two years (1993 and 1994). The results reject our null hypothesis and we conclude that the organizational changes in the county councils improve health care efficiency. Our results further indicate that the potential savings in costs due to a hypothetical switch from budget based allocation to an output based allocation is about 13%. We also found some evidence indicating that county councils with a nonsocialist political majority are relatively more efficient than those with a socialist regime and that large county councils are more efficient than small county councils.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Economics.
Volume (Year): 31 (1999)
Issue (Month): 8 ()
Contact details of provider:
Web page: http://www.tandfonline.com/RAEC20
Other versions of this item:
- Gerdtham, Ulf-G. & Rehnberg, Clas & Tambour, Magnus, 1997. "The Impact of Internal Markets on Health Care Efficiency: Evidence from Health Care Reforms in Sweden," Working Paper Series in Economics and Finance 170, Stockholm School of Economics.
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Borden, James P., 1988. "An assessment of the impact of diagnosis-related group (DRG)-based reimbursement on the technical efficiency of New Jersey hospitals using data envelopment analysis," Journal of Accounting and Public Policy, Elsevier, vol. 7(2), pages 77-96.
- Blomqvist, Ake, 1991. "The doctor as double agent: Information asymmetry, health insurance, and medical care," Journal of Health Economics, Elsevier, vol. 10(4), pages 411-432.
- Per Andersen & Niels Christian Petersen, 1993. "A Procedure for Ranking Efficient Units in Data Envelopment Analysis," Management Science, INFORMS, vol. 39(10), pages 1261-1264, October.
- Magnussen, Jon & Nyland, Kari, 2008. "Measuring efficiency in clinical departments," Health Policy, Elsevier, vol. 87(1), pages 1-7, July.
- Moreno-Serra, Rodrigo & Wagstaff, Adam, 2010.
"System-wide impacts of hospital payment reforms: Evidence from Central and Eastern Europe and Central Asia,"
Journal of Health Economics,
Elsevier, vol. 29(4), pages 585-602, July.
- Moreno-Serra, Rodrigo & Wagstaff, Adam, 2009. "System-wide impacts of hospital payment reforms : evidence from central and eastern Europe and central Asia," Policy Research Working Paper Series 4987, The World Bank.
- Pablo Gottret & George Schieber, 2006. "Health Financing Revisited : A Practitioner's Guide," World Bank Publications, The World Bank, number 7094.
- Hamada, Hironori & Sekimoto, Miho & Imanaka, Yuichi, 2012. "Effects of the per diem prospective payment system with DRG-like grouping system (DPC/PDPS) on resource usage and healthcare quality in Japan," Health Policy, Elsevier, vol. 107(2), pages 194-201.
- Biørn, Erik & Hagen, Terje P. & Iversen, Tor & Magnussen, Jon, 2009.
"The effect of activity-based financing on hospital efficiency: A panel data analysis of DEA efficiency scores 1992-2000,"
HERO On line Working Paper Series
2002:8, Oslo University, Health Economics Research Programme.
- Biorn, Erik & Hagen, Terje P. & Iversen, Tor & Magnussen, Jon, 2002. "The Effect of Activity-Based Financing on Hospital Efficiency: A Panel Data Analysis of DEA Efficiency Scores 1992-2000," MPRA Paper 8099, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.