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Cost efficiency of US hospitals: a stochastic frontier approach

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  • Michael D. Rosko

Abstract

This study examined the impact of managed care and other environmental factors on hospital inefficiency in 1631 US hospitals during the period 1990–1996. A panel, stochastic frontier regression model was used to estimate inefficiency parameters and inefficiency scores. The results suggest that mean estimated inefficiency decreased by about 28% during the study period. Inefficiency was negatively associated with health maintenance organization (HMO) penetration and industry concentration. It was positively related with Medicare share and for‐profit ownership status. Copyright © 2001 John Wiley & Sons, Ltd.

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  • Michael D. Rosko, 2001. "Cost efficiency of US hospitals: a stochastic frontier approach," Health Economics, John Wiley & Sons, Ltd., vol. 10(6), pages 539-551, September.
    • Handle: RePEc:wly:hlthec:v:10:y:2001:i:6:p:539-551
    DOI: 10.1002/hec.607
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