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Efficiency and Technological Change in Health Care Services in Ontario

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  • H. Chowdhury

    ()
    (CEPA - School of Economics, The University of Queensland)

  • V. Zelenyuk

    ()
    (CEPA - School of Economics, The University of Queensland)

  • W. Wodchis

    ()
    (CEPA - School of Economics, The University of Queensland)

  • A. Laporte

    ()
    (CEPA - School of Economics, The University of Queensland)

Abstract

This paper presents productivity measurement results for hospital services using panel data for Ontario hospitals between 2003 and 2006. The study uses the Malmquist Productivity index (MPI) obtained through the application of Data Envelopment Analysis (DEA) which is decomposed into efficiency change (ECH), i.e., movement towards the best practice frontier and technological change (TCH), i.e., movement of the frontier itself (Färe et al. [12]). The study also uses kernel density estimation techniques for analysis of efficiency distributions of the productivity scores and their components across different types of hospitals (e.g. small /large and rural /urban) and over time. Our results suggest that in addition to average productivity it is important to examine distributions of productivity and of its components which we find differs by hospital type and over time. We find that productivity growth occurred mostly through improvement in technology and in spite of declining efficiency. The results provide useful insight into the underlying mechanisms of observed changes in overall productivity, in technological change and in technical efficiency change in this vital sector of the health care market.

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File URL: http://www.uq.edu.au/economics/cepa/docs/WP/WP082010.pdf
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Paper provided by School of Economics, University of Queensland, Australia in its series CEPA Working Papers Series with number WP082010.

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Date of creation: Nov 2010
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Handle: RePEc:qld:uqcepa:54

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  1. Biørn, Erik & Hagen, Terje P. & Iversen, Tor & Magnussen, Jon, 2009. "The effect of activity-based financing on hospital efficiency: A panel data analysis of DEA efficiency scores 1992-2000," HERO On line Working Paper Series 2002:8, Oslo University, Health Economics Research Programme.
  2. Emrouznejad, Ali & Parker, Barnett R. & Tavares, Gabriel, 2008. "Evaluation of research in efficiency and productivity: A survey and analysis of the first 30 years of scholarly literature in DEA," Socio-Economic Planning Sciences, Elsevier, vol. 42(3), pages 151-157, September.
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