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Measuring the Relative Performance of Providers of a Health Service

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  • Daniel A. Ackerberg
  • Matilde P. Machado
  • Michael H. Riordan

Abstract

A methodology is developed and applied to compare the performance of publicly funded agencies providing treatment for alcohol abuse in Maine. The methodology estimates a Wiener process that determines the duration of completed treatments, while allowing for agency differences in the effectiveness of treatment, standards for completion of treatment, patient attrition, and the characteristics of patient populations. Notably, the Wiener process model separately identifies agency fixed effects that describe differences in the effectiveness of treatment ('treatment effects'), and effects that describe differences in the unobservable characteristics of patients ('population effects'). The estimated model enables hypothetical comparisons of how different agencies would treat the same populations. The policy experiment of transferring the treatment practices of more cost-effective agencies suggests that Maine could have significantly reduced treatment costs without compromising health outcomes by identifying and transferring best practices.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8385.

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Date of creation: Jul 2001
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Handle: RePEc:nbr:nberwo:8385

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  1. Butler, J S, et al, 1987. "Measurement Error in Self-reported Health Variables," The Review of Economics and Statistics, MIT Press, MIT Press, vol. 69(4), pages 644-50, November.
  2. Machado, Matilde P., 2001. "Dollars and performance: treating alcohol misuse in Maine," Journal of Health Economics, Elsevier, Elsevier, vol. 20(4), pages 639-666, July.
  3. Mingshan Lu, 1999. "Separating the True Effect from Gaming in Incentive-Based Contracts in Health Care," Journal of Economics & Management Strategy, Wiley Blackwell, Wiley Blackwell, vol. 8(3), pages 383-431, 09.
  4. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, Econometric Society, vol. 64(6), pages 1263-97, November.
  5. James Heckman, 1997. "Instrumental Variables: A Study of Implicit Behavioral Assumptions Used in Making Program Evaluations," Journal of Human Resources, University of Wisconsin Press, University of Wisconsin Press, vol. 32(3), pages 441-462.
  6. Michael P. Keane & Kenneth I. Wolpin, 1995. "The career decisions of young men," Working Papers, Federal Reserve Bank of Minneapolis 559, Federal Reserve Bank of Minneapolis.
  7. James J. Heckman & Jeffrey A. Smith, 1995. "Assessing the Case for Social Experiments," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 9(2), pages 85-110, Spring.
  8. Charles F. Manski, 1996. "Learning about Treatment Effects from Experiments with Random Assignment of Treatments," Journal of Human Resources, University of Wisconsin Press, University of Wisconsin Press, vol. 31(4), pages 709-733.
  9. Zvi Eckstein & Kenneth I. Wolpin, 1999. "Why Youths Drop Out of High School: The Impact of Preferences, Opportunities, and Abilities," Econometrica, Econometric Society, Econometric Society, vol. 67(6), pages 1295-1340, November.
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Cited by:
  1. Matilde P. Machado, 2003. "Substance Abuse Treatment: What Do We Know? An Economist’S Perspective," Economics Working Papers, Universidad Carlos III, Departamento de Economía we035621, Universidad Carlos III, Departamento de Economía.
  2. Lindelow, Magnus & Wagstaff, Adam, 2003. "Health facility surveys : an introduction," Policy Research Working Paper Series, The World Bank 2953, The World Bank.
  3. Lien, Hsien-Ming & Albert Ma, Ching-To & McGuire, Thomas G., 2004. "Provider-client interactions and quantity of health care use," Journal of Health Economics, Elsevier, Elsevier, vol. 23(6), pages 1261-1283, November.

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