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Can Data Envelopment Analysis Provide A Scalar Index Of ‘Value’?

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  • Bryan Dowd
  • Tami Swenson
  • Robert Kane
  • Shriram Parashuram
  • Robert Coulam

Abstract

The concept of ‘value’ typically includes a combination of cost and quality measures. Some approaches to incorporating value into payment systems treat cost and quality as separate dimensions, but policymakers have expressed interest in a single scalar index that combines cost and quality. Treating risk‐adjusted cost as an input and multiple measures of quality as outputs, we examine whether data envelopment analysis input efficiency is associated with higher quality and lower cost in a sample of physician practices using 2008 US Medicare claims data from Colorado. The findings suggest that input efficiency might provide a useful scalar measure of value for a value‐based payment system for physician services. Copyright © 2013 John Wiley & Sons, Ltd.

Suggested Citation

  • Bryan Dowd & Tami Swenson & Robert Kane & Shriram Parashuram & Robert Coulam, 2014. "Can Data Envelopment Analysis Provide A Scalar Index Of ‘Value’?," Health Economics, John Wiley & Sons, Ltd., vol. 23(12), pages 1465-1480, December.
    • Handle: RePEc:wly:hlthec:v:23:y:2014:i:12:p:1465-1480
    DOI: 10.1002/hec.3000
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    References listed on IDEAS

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    1. William W. Cooper & Lawrence M. Seiford & Joe Zhu (ed.), 2011. "Handbook on Data Envelopment Analysis," International Series in Operations Research and Management Science, Springer, number 978-1-4419-6151-8, September.
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    3. William W. Cooper & Lawrence M. Seiford & Joe Zhu, 2011. "Data Envelopment Analysis: History, Models, and Interpretations," International Series in Operations Research & Management Science, in: William W. Cooper & Lawrence M. Seiford & Joe Zhu (ed.), Handbook on Data Envelopment Analysis, chapter 0, pages 1-39, Springer.
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    5. Léopold Simar & Paul Wilson, 1999. "Of Course We Can Bootstrap DEA Scores! But Does It Mean Anything? Logic Trumps Wishful Thinking," Journal of Productivity Analysis, Springer, vol. 11(1), pages 93-97, February.
    6. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
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    Cited by:

    1. Vidoli, Francesco & Auteri, Monica, 2022. "Health-care demand and supply at municipal level: A spatial disaggregation approach," Socio-Economic Planning Sciences, Elsevier, vol. 84(C).
    2. Schang, Laura & Hynninen, Yrjänä & Morton, Alec & Salo, Ahti, 2016. "Developing robust composite measures of healthcare quality – Ranking intervals and dominance relations for Scottish Health Boards," Social Science & Medicine, Elsevier, vol. 162(C), pages 59-67.
    3. Fengyi Lin & Yung-Jr Deng & Wen-Min Lu & Qian Long Kweh, 2019. "Impulse response function analysis of the impacts of hospital accreditations on hospital efficiency," Health Care Management Science, Springer, vol. 22(3), pages 394-409, September.
    4. Margit Sommersguter-Reichmann, 2022. "Health care quality in nonparametric efficiency studies: a review," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 30(1), pages 67-131, March.
    5. Nils Gutacker & Andrew Street, 2018. "Multidimensional performance assessment of public sector organisations using dominance criteria," Health Economics, John Wiley & Sons, Ltd., vol. 27(2), pages 13-27, February.

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