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Heterogeneity in Hospitals' Responses to a Financial Reform: A Random Coefficient Analysis of The Impact of Activity-Based Financing on Efficiency

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Author Info
Biorn, Erik
Hagen, Terje P
Iversen, Tor
Magnussen, Jon

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Abstract

The paper examines the heterogeneity with respect to the impact of a financial reform - Activity Based Financing (ABF) - on hospital efficiency in Norway. Measures of technical efficiency and of cost-efficiency are considered. The data set is from a contiguous ten-year panel of 47 hospitals covering both pre-ABF years and years after its imposition. Substantial heterogeneity in the responses, as measured by both estimated and predicted coefficients, is found. Rank correlations between the estimated/predicted coefficients of the ABF dummy and the pre-ABF/post-ABF efficiencies are examined. Overall, improvement seems to be more pronounced in technical efficiency than in cost-efficiency.

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File URL: http://mpra.ub.uni-muenchen.de/8169/
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Publisher Info
Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 8100.

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Date of creation: 2006
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Handle: RePEc:pra:mprapa:8100

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Related research
Keywords: Health Econometrics Panel Data Hospital Efficiency Activity-Based Financing Random Coefficients Heterogeneity Rank Correlation

Find related papers by JEL classification:
H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
I12 - Health, Education, and Welfare - - Health - - - Health Production
I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data
C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data

References listed on IDEAS
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  1. Tulkens, H. & Vanden Eeckaut, P., 1993. "Non-parametric Efficiency, Progress and Regress Measures for Panel data: Methodological Aspects," Papers 9316, Universite catholique de Louvain - Center for Operations Research and Economics (CORE).
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  2. Fare, Rolf & Knox Lovell, C. A., 1978. "Measuring the technical efficiency of production," Journal of Economic Theory, Elsevier, vol. 19(1), pages 150-162, October. [Downloadable!] (restricted)
  3. Chalkley, Martin & Malcomson, James M., 1998. "Contracting for health services when patient demand does not reflect quality," Journal of Health Economics, Elsevier, vol. 17(1), pages 1-19, January. [Downloadable!] (restricted)
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  4. Erik Biørn, Kjersti-Gro Lindquist and, 1998. "Random Coefficients and Unbalanced Panels: An Application on Data from Norwegian Chemical Plants," Discussion Papers 235, Research Department of Statistics Norway. [Downloadable!]
  5. Newhouse, Joseph P. & Byrne, Daniel J., 1988. "Did Medicare's Prospective Payment System cause length of stay to fall?," Journal of Health Economics, Elsevier, vol. 7(4), pages 413-416, December. [Downloadable!] (restricted)
  6. Daniel P. Kessler & Mark B. McClellan, 2002. "The Effects of Hospital Ownership on Medical Productivity," RAND Journal of Economics, The RAND Corporation, vol. 33(3), pages 488-506, Autumn.
  7. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November. [Downloadable!] (restricted)
  8. Sloan, Frank A., 2000. "Not-for-profit ownership and hospital behavior," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 21, pages 1141-1174 Elsevier. [Downloadable!] (restricted)
  9. Guillem López-Casasnovas & Marc Saez, 1999. "The impact of teaching status on average costs in Spanish hospitals," Health Economics, John Wiley & Sons, Ltd., vol. 8(7), pages 641-651.
  10. Erik Biørn, Kjersti-Gro Lindquist and Terje Skjerpen, 2000. "Heterogeneity in Returns to Scale: A Random Coefficient Analysis with Unbalanced Panel Data," Discussion Papers 292, Research Department of Statistics Norway. [Downloadable!]
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