A comparative inpatient care efficiency analysis of safety-net vs. non-safety-net hospitals: an analysis using Massachusetts inpatient claims data from 2015 to 2019

This study examines the inpatient service efficiency of safety-net and non-safety-net hospitals using a two-stage approach at both the hospital and physician levels. For the hospital-level analysis, we conducted 430 Data Envelopment Analysis (DEA) models at the first stage to measure efficiency at the Diagnosis-Related Groups (DRG) level. In the second stage, Tobit and logistic regression models were applied to compare safety-net hospitals to non-safety-net hospitals. For the physician-level analysis, we conducted 386 DEA models to measure individual physician efficiency within specific DRGs. In the second stage, we compared the performance of the same physicians working in safety-net versus non-safety-net hospitals. The findings reveal that non-safety-net hospitals demonstrate significantly higher efficiency than safety-net hospitals. However, comparisons of the same physicians across settings show no significant differences in individual efficiency. This suggests that the efficiency gap arises not from the support or motivation provided by hospitals but from differences in the quality of physicians employed. These results underscore the need for policies that help safety-net hospitals attract and retain high-quality physicians to bridge the efficiency gap and better serve vulnerable populations.