The Impact of Internal Markets on Health Care Efficiency: Evidence from Health Care Reforms in Sweden
AbstractA purchaser/provider split together with output- based reimbursement were recently introduced by several Swedish county councils. These changes have been motivated by arguments of efficiency and consumer choice. This paper tests the null hypothesis that hospital services are provided as efficiently by county councils with internal markets as by county councils with budget reimbursement. We first estimate technical efficiency using data envelopment analysis and then we regress the efficiency scores as the dependent variable on new internal organisations in a multiple regression by use of pooled cross-section data for the 26 county councils for two years (1993 and 1994). The results reject our null hypothesis and we conclude that the organizational changes in the county councils improve health care efficiency. Our results further indicate that the potential savings in costs due to a hypothetical switch from a budget based allocation to a performance based allocation is about 13%. We also found some evidence indicating that county councils with a non-socialist political majority are relatively more efficient than those with a socialist regime and that large county councils are more efficient than small county councils.
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Bibliographic InfoPaper provided by Stockholm School of Economics in its series Working Paper Series in Economics and Finance with number 170.
Length: 33 pages
Date of creation: Apr 1997
Date of revision:
Publication status: Published in Applied Economics, 1999, pages 935-945.
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Postal: The Economic Research Institute, Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden
Phone: +46-(0)8-736 90 00
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More information through EDIRC
Internal markets; productivity; regression; analysis; pooled data;
Other versions of this item:
- U. -G. Gerdtham & C. Rehnberg & M. Tambour, 1999. "The impact of internal markets on health care efficiency: evidence from health care reforms in Sweden," Applied Economics, Taylor & Francis Journals, vol. 31(8), pages 935-945.
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
This paper has been announced in the following NEP Reports:
- NEP-ALL-1998-11-05 (All new papers)
- NEP-CDM-1998-11-05 (Collective Decision-Making)
- NEP-EFF-1998-11-05 (Efficiency & Productivity)
- NEP-HEA-1998-11-05 (Health Economics)
- NEP-PUB-1998-11-05 (Public Finance)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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