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Technical efficiency and economies of diversification in health care

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  • Diego Prior
  • Magda Solà

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Abstract

In national health services, where there is a tendency towards a lack of resources and a continuous increase in demand, it is necessary to implement decisions that promote efficiency. In this paper we focus on potential diversification economies as a strategy to increase efficiency levels. We evaluate the change in efficiency in Catalan hospitals between 1987 and 1992, and analyse the presence of possible diversification economies in each hospital. We use Data Envelopment Analysis, which does not need information on either input or output prices. The results are that the majority of hospitals could increase their efficiency and reduce their costs by diversification to the output-mix offered. Potential productivity gains are between 29% and 46%. Copyright Kluwer Academic Publishers 2000

Suggested Citation

  • Diego Prior & Magda Solà, 2000. "Technical efficiency and economies of diversification in health care," Health Care Management Science, Springer, vol. 3(4), pages 299-307, September.
  • Handle: RePEc:kap:hcarem:v:3:y:2000:i:4:p:299-307
    DOI: 10.1023/A:1019070113893
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    File URL: http://hdl.handle.net/10.1023/A:1019070113893
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    Citations

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    Cited by:

    1. O'Neill, Liam & Rauner, Marion & Heidenberger, Kurt & Kraus, Markus, 2008. "A cross-national comparison and taxonomy of DEA-based hospital efficiency studies," Socio-Economic Planning Sciences, Elsevier, vol. 42(3), pages 158-189, September.
    2. Shanmugam, Ramalingam & Johnson, Charles, 2007. "At a crossroad of data envelopment and principal component analyses," Omega, Elsevier, vol. 35(4), pages 351-364, August.
    3. repec:eee:ejores:v:266:y:2018:i:2:p:716-735 is not listed on IDEAS
    4. Gary Ferrier & Hervé Leleu & James Moises & Vivian Valdmanis, 2013. "The Focus Efficiency of U.S. Hospitals," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 41(3), pages 241-263, September.
    5. Maria Balaguer-Coll & Diego Prior & Emili Tortosa-Ausina, 2010. "Decentralization and efficiency of local government," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 45(3), pages 571-601, December.
    6. Jos L. T. Blank & Bart L. Van Hulst, 2009. "Productive innovations in hospitals: an empirical research on the relation between technology and productivity in the Dutch hospital industry," Health Economics, John Wiley & Sons, Ltd., vol. 18(6), pages 665-679.
    7. Guillem López & Joan Costa-Font & Ivan Planas, 2004. "Diversity and regional inequalities: Assessing the outcomes of the Spanish 'System of Health Care Services'," Economics Working Papers 745, Department of Economics and Business, Universitat Pompeu Fabra.
    8. Anne Hvenegaard & Jacob Arendt & Andrew Street & Dorte Gyrd-Hansen, 2011. "Exploring the relationship between costs and quality: Does the joint evaluation of costs and quality alter the ranking of Danish hospital departments?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 12(6), pages 541-551, December.
    9. Kim-Huong Nguyen & Tim Coelli, 2009. "Quantifying the effects of modelling choices on hospital efficiency measures: A meta-regression analysis," CEPA Working Papers Series WP072009, School of Economics, University of Queensland, Australia.
    10. Christian Growitsch & Heike Wetzel, 2006. "Economies of Scope in European Railways: An Efficiency Analysis," Working Paper Series in Economics 29, University of Lüneburg, Institute of Economics.
    11. Blank, Jos L. T. & Vogelaar, Iris, 2004. "Specifying technical change: a research on the nature of technical change in Dutch hospital industry," The Quarterly Review of Economics and Finance, Elsevier, vol. 44(3), pages 448-463, July.
    12. Pablo Arocena, 2005. "The measurement of scope, scale and diversification economies: How (in)efficient is electricity restructuring and unbundling?," Working Papers 2005/1, Institut d'Economia de Barcelona (IEB).
    13. Kittelsen, Sverre A.C. & Magnussen, Jon, 2009. "Economies of scope in Norwegian hospital production - A DEA analysis," HERO On line Working Paper Series 2003:8, Oslo University, Health Economics Research Programme.
    14. Emili Tortosa Ausina & Diego Prior & María Teresa Balaguer-Coll, 2006. "Decentralization And Effiency In Spanish Local Goverment," Working Papers. Serie EC 2006-02, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    15. Arocena, Pablo, 2008. "Cost and quality gains from diversification and vertical integration in the electricity industry: A DEA approach," Energy Economics, Elsevier, vol. 30(1), pages 39-58, January.

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