IDEAS home Printed from https://ideas.repec.org/p/yor/yorken/99-27.html
   My bibliography  Save this paper

Efficiency and Administrative Costs in Primary Care

Author

Listed:
  • Antonio Giuffrida
  • Hugh Gravelle
  • Matthew Sutton

Abstract

We construct a simple model of the determinants of administrative managerial effort and apply it explain the doubling of the cost of administering primary care in England in real terms between 1989/90 and 1994/5 following the introduction of the internal market. We find that the main cost driver was the number of GPs, that there are economies of scale but not economies of scope in administration, and that fundholding appeared to increase administrative costs. Most the increase in administrative cost over the period could not be explained by the change in the cost drivers or fundholding, suggesting that the recent abolition of fundholding may do little to reduce primary care administrative costs.

Suggested Citation

  • Antonio Giuffrida & Hugh Gravelle & Matthew Sutton, "undated". "Efficiency and Administrative Costs in Primary Care," Discussion Papers 99/27, Department of Economics, University of York.
    • Handle: RePEc:yor:yorken:99/27
    as

    Download full text from publisher

    File URL: https://www.york.ac.uk/media/economics/documents/discussionpapers/1999/9927.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    2. Caves, Douglas W & Christensen, Laurits R & Tretheway, Michael W, 1980. "Flexible Cost Functions for Multiproduct Firms," The Review of Economics and Statistics, MIT Press, vol. 62(3), pages 477-481, August.
    3. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119.
    4. Schmidt, Peter & Sickles, Robin C, 1984. "Production Frontiers and Panel Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(4), pages 367-374, October.
    5. Darrin L. Baines & David K. Whynes, 1996. "Selection bias in GP fundholding," Health Economics, John Wiley & Sons, Ltd., vol. 5(2), pages 129-140, March.
    6. Newhouse, Joseph P., 1994. "Frontier estimation: How useful a tool for health economics?," Journal of Health Economics, Elsevier, vol. 13(3), pages 317-322, October.
    7. Gaynor, Martin & Pauly, Mark V, 1990. "Compensation and Productive Efficiency of Partnerships: Evidence from Medical Group Practice," Journal of Political Economy, University of Chicago Press, vol. 98(3), pages 544-573, June.
    8. Fournier, Gary M & Mitchell, Jean M, 1992. "Hospital Costs and Competition for Services: A Multiproduct Analysis," The Review of Economics and Statistics, MIT Press, vol. 74(4), pages 627-634, November.
    9. Anthony Scott & David Parkin, 1995. "Investigating hospital efficiency in the new NHS: The role of the translog cost function," Health Economics, John Wiley & Sons, Ltd., vol. 4(6), pages 467-478, November.
    10. Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
    11. Dor, Avi, 1994. "Non-minimum cost functions and the stochastic frontier: On applications to health care providers," Journal of Health Economics, Elsevier, vol. 13(3), pages 329-334, October.
    12. Skinner, Jonathan, 1994. "What do stochastic frontier cost functions tell us about inefficiency?," Journal of Health Economics, Elsevier, vol. 13(3), pages 323-328, October.
    13. Wholey, Douglas & Feldman, Roger & Christianson, Jon B. & Engberg, John, 1996. "Scale and scope economies among health maintenance organizations," Journal of Health Economics, Elsevier, vol. 15(6), pages 657-684, December.
    14. Arellano, M, 1987. "Computing Robust Standard Errors for Within-Groups Estimators," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 49(4), pages 431-434, November.
    15. Dor, Avi & Farley, Dean E., 1996. "Payment source and the cost of hospital care: Evidence from a multiproduct cost function with multiple payers," Journal of Health Economics, Elsevier, vol. 15(1), pages 1-21, February.
    16. Godfrey, L. G. & Hutton, J. P., 1994. "Discriminating between errors-in- variables/simultaneity and misspecification in linear regression models," Economics Letters, Elsevier, vol. 44(4), pages 359-364, April.
    17. Ai, Chunrong & Norton, Edward C., 2000. "Standard errors for the retransformation problem with heteroscedasticity," Journal of Health Economics, Elsevier, vol. 19(5), pages 697-718, September.
    18. Douglas W. Caves & Laurits R. Christensen & Michael W. Tretheway, 1984. "Economies of Density versus Economies of Scale: Why Trunk and Local Service Airline Costs Differ," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 471-489, Winter.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Alexandre Marinho, 2004. "Evidências e Modelos Sobre a Coexistência de Hospitais com Fins Lucrativos e Hospitais sem Fins Lucrativos no Sistema Único de Saúde Brasileiro," Discussion Papers 1041, Instituto de Pesquisa Econômica Aplicada - IPEA.
    2. Stefan Voigt, 2016. "Determinants of judicial efficiency: a survey," European Journal of Law and Economics, Springer, vol. 42(2), pages 183-208, October.
    3. Andrew Street, 2003. "How much confidence should we place in efficiency estimates?," Health Economics, John Wiley & Sons, Ltd., vol. 12(11), pages 895-907, November.
    4. Antonio Giuffrida & Hugh Gravelle, 2001. "Measuring performance in primary care: econometric analysis and DEA," Applied Economics, Taylor & Francis Journals, vol. 33(2), pages 163-175.
    5. Zhichao Wang & Valentin Zelenyuk, 2021. "Performance Analysis of Hospitals in Australia and its Peers: A Systematic Review," CEPA Working Papers Series WP012021, School of Economics, University of Queensland, Australia.
    6. Mann, Stefan, 2001. "Zur Effizienz der deutschen Agrarverwaltung," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 50(05), pages 1-6.
    7. Luis Murillo-Zamorano & Carmelo Petraglia, 2011. "Technical efficiency in primary health care: does quality matter?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 12(2), pages 115-125, April.
    8. Filipe Amado, Carla Alexandra & Dyson, Robert G., 2008. "On comparing the performance of primary care providers," European Journal of Operational Research, Elsevier, vol. 185(3), pages 915-932, March.
    9. M. C. Gouveia & L. C. Dias & C. H. Antunes & M. A. Mota & E. M. Duarte & E. M. Tenreiro, 2016. "An application of value-based DEA to identify the best practices in primary health care," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 38(3), pages 743-767, July.
    10. Rhys Andrews & George A. Boyne, 2009. "Size, Structure and Administrative Overheads: An Empirical Analysis of English Local Authorities," Urban Studies, Urban Studies Journal Limited, vol. 46(4), pages 739-759, April.
    11. Peter C. Smith & Andrew Street, 2005. "Measuring the efficiency of public services: the limits of analysis," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 168(2), pages 401-417, March.
    12. Larjow, Eugenia, 2018. "Administrative costs in health care—A scoping review," Health Policy, Elsevier, vol. 122(11), pages 1240-1248.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Michael D. Rosko, 2001. "Cost efficiency of US hospitals: a stochastic frontier approach," Health Economics, John Wiley & Sons, Ltd., vol. 10(6), pages 539-551, September.
    2. Martijn Ludwig & Frits Merode & Wim Groot, 2010. "Principal agent relationships and the efficiency of hospitals," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 11(3), pages 291-304, June.
    3. João Serafim Tusi da Silveira & Lucélia Ivonete Juliani & Lucas Veiga Ávila & José Tavares De Borba, 2016. "Hospital Technical Efficiency Measurement Through of a Stochastic Frontier Cost Panel," International Business Research, Canadian Center of Science and Education, vol. 9(11), pages 208-214, November.
    4. Mareike Heimeshoff & Jonas Schreyögg & Lukas Kwietniewski, 2014. "Cost and technical efficiency of physician practices: a stochastic frontier approach using panel data," Health Care Management Science, Springer, vol. 17(2), pages 150-161, June.
    5. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2003. "Instrumental variables and GMM: Estimation and testing," Stata Journal, StataCorp LP, vol. 3(1), pages 1-31, March.
    6. Alexander S. Preker & Xingzhu Liu & Edit V. Velenyi & Enis Baris, 2007. "Public Ends, Private Means : Strategic Purchasing of Health Services," World Bank Publications - Books, The World Bank Group, number 6683, December.
    7. Farsi, Mehdi & Filippini, Massimo, 2009. "An analysis of cost efficiency in Swiss multi-utilities," Energy Economics, Elsevier, vol. 31(2), pages 306-315, March.
    8. Koop, Gary & Osiewalski, Jacek & Steel, Mark F. J., 1997. "Bayesian efficiency analysis through individual effects: Hospital cost frontiers," Journal of Econometrics, Elsevier, vol. 76(1-2), pages 77-105.
    9. Andrew Worthington, 1999. "An Empirical Survey Of Frontier Efficiency Measurement Techniques In Healthcare Services," School of Economics and Finance Discussion Papers and Working Papers Series 067, School of Economics and Finance, Queensland University of Technology.
    10. Lukas Kwietniewski & Jonas Schreyögg, 2018. "Efficiency of physician specialist groups," Health Care Management Science, Springer, vol. 21(3), pages 409-425, September.
    11. Kiviet, Jan F. & Pleus, Milan, 2017. "The performance of tests on endogeneity of subsets of explanatory variables scanned by simulation," Econometrics and Statistics, Elsevier, vol. 2(C), pages 1-21.
    12. Lukas Kwietniewski & Jonas Schreyögg, 2018. "Profit efficiency of physician practices: a stochastic frontier approach using panel data," Health Care Management Science, Springer, vol. 21(1), pages 76-86, March.
    13. Sari, Nazmi, 2003. "Efficiency outcomes of market concentration and managed care," International Journal of Industrial Organization, Elsevier, vol. 21(10), pages 1571-1589, December.
    14. Rowena Jacobs, 2000. "Alternative methods to examine hospital efficiency: Data Envelopment Analysis and Stochastic Frontier Analysis," Working Papers 177chedp, Centre for Health Economics, University of York.
    15. Mehdi Farsi & Massimo Filippini, 2008. "Effects of ownership, subsidization and teaching activities on hospital costs in Switzerland," Health Economics, John Wiley & Sons, Ltd., vol. 17(3), pages 335-350, March.
    16. Mehdi Farsi & Massimo Filippini & Diego Lunati, 2008. "Economies of Scale and Efficiency Measurement in Switzerland's Nursing Homes," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 144(III), pages 359-378, September.
    17. Lindrooth, Richard C. & Lo Sasso, Anthony T. & Bazzoli, Gloria J., 2003. "The effect of urban hospital closure on markets," Journal of Health Economics, Elsevier, vol. 22(5), pages 691-712, September.
    18. Marini G & Miraldo M, 2009. "The costs of new organisational and financial freedom: The case of English NHS trusts," Health, Econometrics and Data Group (HEDG) Working Papers 09/26, HEDG, c/o Department of Economics, University of York.
    19. Stefan Meyer, 2015. "Payment schemes and cost efficiency: evidence from Swiss public hospitals," International Journal of Health Economics and Management, Springer, vol. 15(1), pages 73-97, March.
    20. Jennifer L. Troyer, 2002. "Cross‐Subsidization in Nursing Homes: Explaining Rate Differentials Among Payer Types," Southern Economic Journal, John Wiley & Sons, vol. 68(4), pages 750-773, April.

    More about this item

    Keywords

    primary care; administrative costs; efficiency measurement; performance indicators.;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:yor:yorken:99/27. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Paul Hodgson (email available below). General contact details of provider: https://edirc.repec.org/data/deyoruk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.