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Technical, scale, and size efficiency in nursing home care: A nonparametric analysis of Connecticut homes

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  • Sajal Chattopadhyay
  • Subhash C. Ray

Abstract

Maindiratta (1990) questioned the usefulness of the concept of scale efficiency in production as the most productive scale size (MPSS) usually requires altering the scale of output produced. If the decision making unit (DMU) is required to deliver a specific output bundle, then altering output along with the input scale to reach the MPSS is not a valid recommendation. He proposed a measure of the size efficiency of a DMU. In this paper, we apply Data Envelopment Analysis (DEA) to examine the levels of technical, scale, and size efficiency of individual nursing homes providing health care to the elderly. The data used relate to the operations of 140 nursing homes from Connecticut, USA during the year 1982–83. Maindiratta's model is input‐oriented. By contrast, our study is output‐oriented and we appropriately reformulate Maindiratta's model. The findings show that in several cases size efficiency is less than unity. This suggests that the most efficient production of output would require restructuring of the nursing home under investigation as more than one small unit. We also compare the efficiency levels of ‘for‐profit’ homes with those of ‘not‐for‐profit’ homes.

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  • Sajal Chattopadhyay & Subhash C. Ray, 1996. "Technical, scale, and size efficiency in nursing home care: A nonparametric analysis of Connecticut homes," Health Economics, John Wiley & Sons, Ltd., vol. 5(4), pages 363-373, July.
    • Handle: RePEc:wly:hlthec:v:5:y:1996:i:4:p:363-373
    DOI: 10.1002/(SICI)1099-1050(199607)5:43.0.CO;2-1
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    References listed on IDEAS

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    Cited by:

    1. Erlandsen,E. & Forsund,F.R., 1999. "Efficiency in the provision of municipal nursing- and home-care services : the Norwegian experience," Memorandum 32/1999, Oslo University, Department of Economics.
    2. Vania Sena & Clara Dismuke, "undated". "Has the DRG System Influenced the Efficiency of Diagnostic Technology in Portugal?," Discussion Papers 98/6, Department of Economics, University of York.
    3. Iparraguirre, José Luis & Ma, Ruosi, 2015. "Efficiency in the provision of social care for older people. A three-stage Data Envelopment Analysis using self-reported quality of life," Socio-Economic Planning Sciences, Elsevier, vol. 49(C), pages 33-46.
    4. Dan Friesner & Robert Roseman & Matthew McPherson, 2008. "Are hospitals seasonally inefficient? Evidence from Washington State," Applied Economics, Taylor & Francis Journals, vol. 40(6), pages 699-723.
    5. Necmi Avkiran & Alan McCrystal, 2014. "Intertemporal analysis of organizational productivity in residential aged care networks: scenario analyses for setting policy targets," Health Care Management Science, Springer, vol. 17(2), pages 113-125, June.
    6. Andrew Worthington, 1999. "An Empirical Survey Of Frontier Efficiency Measurement Techniques In Healthcare Services," School of Economics and Finance Discussion Papers and Working Papers Series 067, School of Economics and Finance, Queensland University of Technology.

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