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Measuring hospital cost efficiency with panel data models

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  • Miika Linna

    (National Research and Development Centre for Welfare and Health, Helsinki, Finland)

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    Abstract

    This paper investigated the development of hospital cost efficiency and productivity in Finland in 1988-1994 using a comparative application of parametric and non-parametric panel models. Stochastic cost frontier models with a time-varying inefficiency component were used as parametric methods. As non-parametric methods various DEA models were employed to calculate efficiency scores and the Malmquist productivity index. The results revealed a 3-5% annual average increase in productivity, half of which was due to improvement in cost efficiency and half due to technological change. The results by parametric and non-parametric methods compared well with respect to individual efficiency scores, time-varying efficiency and technological change. The state subsidy reform of 1993 did not seem to have any observable effects on the hospital efficiency. © 1998 John Wiley & Sons, Ltd.

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    Bibliographic Info

    Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

    Volume (Year): 7 (1998)
    Issue (Month): 5 ()
    Pages: 415-427

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    Handle: RePEc:wly:hlthec:v:7:y:1998:i:5:p:415-427

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    Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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