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An econometric study of costs of teaching and research in Finnish hospitals

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  • Miika Linna
  • Unto Häkkinen
  • Eero Linnakko

Abstract

In this study we used stochastic frontier cost functions to estimate the teaching and research costs of Finnish hospitals. Average and marginal cost estimates were used to evaluate the current reimbursement system as well as to calculate the total expenditure on teaching and research in hospitals. The efficiency adjustment had significant impact on the marginal and average cost estimates of the teaching and research output. The main policy implication of this study is that university teaching hospitals are able to produce both teaching and research output at significantly lower marginal and average incremental costs than other hospitals. According to our results 55% of the total state reimbursement budget for teaching and research (FIM 665 million) should be allocated to teaching and 45% to research. © 1998 John Wiley & Sons, Ltd.

Suggested Citation

  • Miika Linna & Unto Häkkinen & Eero Linnakko, 1998. "An econometric study of costs of teaching and research in Finnish hospitals," Health Economics, John Wiley & Sons, Ltd., vol. 7(4), pages 291-305, June.
    • Handle: RePEc:wly:hlthec:v:7:y:1998:i:4:p:291-305
    DOI: 10.1002/(SICI)1099-1050(199806)7:4<291::AID-HEC343>3.0.CO;2-4
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    1. Marketta Veihola & Pekka Aroviita & Riitta Kekomäki & Miika Linna & Harri Sintonen, 2008. "Discarded cellular components and the technical efficiency of component preparation," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 9(4), pages 325-331, November.
    2. Medin, Emma & Häkkinen, Unto & Linna, Miika & Anthun, Kjartan S. & Kittelsen, Sverre A.C. & Rehnberg, Clas, 2013. "International hospital productivity comparison: Experiences from the Nordic countries," Health Policy, Elsevier, vol. 112(1), pages 80-87.
    3. Julia Bonastre & Marc le Vaillant & Gerard de Pouvourville, 2011. "The impact of research on hospital costs of care: an empirical study," Health Economics, John Wiley & Sons, Ltd., vol. 20(1), pages 73-84, January.
    4. Maria Castro Lobo & Yasar Ozcan & Angela Silva & Marcos Lins & Roberto Fiszman, 2010. "Financing reform and productivity change in Brazilian teaching hospitals: Malmquist approach," 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. 18(2), pages 141-152, June.
    5. Camilla Mastromarco & Lenka Stastna & Jana Votapkova, 2019. "Efficiency of hospitals in the Czech Republic: Conditional efficiency approach," Journal of Productivity Analysis, Springer, vol. 51(1), pages 73-89, February.
    6. Emma Medin & Kjartan Anthun & Unto Häkkinen & Sverre Kittelsen & Miika Linna & Jon Magnussen & Kim Olsen & Clas Rehnberg, 2011. "Cost efficiency of university hospitals in the Nordic countries: a cross-country analysis," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 12(6), pages 509-519, December.
    7. Oliveira, Monica D. & Bevan, Gwyn, 2008. "Modelling hospital costs to produce evidence for policies that promote equity and efficiency," European Journal of Operational Research, Elsevier, vol. 185(3), pages 933-947, March.
    8. 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.
    9. Pablo Arocena & Ariadna García‐Prado, 2007. "Accounting for quality in the measurement of hospital performance: evidence from Costa Rica," Health Economics, John Wiley & Sons, Ltd., vol. 16(7), pages 667-685, July.
    10. Robert Stefko & Beata Gavurova & Kristina Kocisova, 2018. "Healthcare efficiency assessment using DEA analysis in the Slovak Republic," Health Economics Review, Springer, vol. 8(1), pages 1-12, December.
    11. Lobo, Maria Stella de Castro & Estellita Lins, Marcos Pereira & Rodrigues, Henrique de Castro & Soares, Gabriel Martins, 2022. "Planning feasible and efficient operational scenarios for a university hospital through multimethodology," Socio-Economic Planning Sciences, Elsevier, vol. 84(C).
    12. Johannessen, Karl Arne & Kittelsen, Sverre A.C. & Hagen, Terje P., 2017. "Assessing physician productivity following Norwegian hospital reform: A panel and data envelopment analysis," Social Science & Medicine, Elsevier, vol. 175(C), pages 117-126.
    13. Miika Linna & Unto Häkkinen, 2006. "Reimbursing for the costs of teaching and research in finnish hospitals: A stochastic frontier analysis," International Journal of Health Economics and Management, Springer, vol. 6(1), pages 83-97, March.
    14. 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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