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Incorporating quality into the measurement of hospital efficiency: a double DEA approach

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  • Gary Ferrier

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  • Julie Trivitt

Abstract

This paper uses “double DEA” to assess how accounting for quality influences DEA technical efficiency scores of a sample of 1,074 US hospitals. In the first use of DEA, quality indices are estimated using a variety of process and outcome measures of quality. In the second use of DEA, technical efficiency is assessed while controlling for quality. A variety of DEA quality indices and a DEA variety of efficiency models are compared to determine how the treatment of quality influences findings regarding technical efficiency. Controlling for efficiency does matter, with outcome measures having an apparently greater impact than process measures. Given the call for improved quality and better cost containment, controlling for quality is an important contribution to efficiency analysis. Copyright Springer Science+Business Media, LLC 2013

Suggested Citation

  • Gary Ferrier & Julie Trivitt, 2013. "Incorporating quality into the measurement of hospital efficiency: a double DEA approach," Journal of Productivity Analysis, Springer, vol. 40(3), pages 337-355, December.
  • Handle: RePEc:kap:jproda:v:40:y:2013:i:3:p:337-355
    DOI: 10.1007/s11123-012-0305-z
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    References listed on IDEAS

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    1. B. Hollingsworth & P. Smith, 2003. "Use of ratios in data envelopment analysis," Applied Economics Letters, Taylor & Francis Journals, vol. 10(11), pages 733-735.
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    7. Knox Lovell, C. A. & Pastor, Jesus T. & Turner, Judi A., 1995. "Measuring macroeconomic performance in the OECD: A comparison of European and non-European countries," European Journal of Operational Research, Elsevier, vol. 87(3), pages 507-518, December.
    8. 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.
    9. Andrei Shleifer, 1985. "A Theory of Yardstick Competition," RAND Journal of Economics, The RAND Corporation, vol. 16(3), pages 319-327, Autumn.
    10. Mehdi Farsi, 2004. "Changes in Hospital Quality after Conversion in Ownership Status," International Journal of Health Economics and Management, Springer, vol. 4(3), pages 211-230, September.
    11. Olesen, O. B. & Petersen, N. C., 1995. "Incorporating quality into data envelopment analysis: a stochastic dominance approach," International Journal of Production Economics, Elsevier, vol. 39(1-2), pages 117-135, April.
    12. Laurens Cherchye, 2001. "Using data envelopment analysis to assess macroeconomic policy performance," Applied Economics, Taylor & Francis Journals, vol. 33(3), pages 407-416.
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    Citations

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    Cited by:

    1. Varabyova, Yauheniya & Blankart, Carl Rudolf Berchtold & Schreyögg, Jonas, 2016. "Using nonparametric conditional approach to integrate quality into efficiency analysis: Empirical evidence from cardiology departments," hche Research Papers 2016/11, University of Hamburg, Hamburg Center for Health Economics (hche).
    2. repec:zbw:tuisbw:22017 is not listed on IDEAS
    3. repec:spr:annopr:v:261:y:2018:i:1:d:10.1007_s10479-017-2628-7 is not listed on IDEAS
    4. repec:eee:soceps:v:60:y:2017:i:c:p:15-23 is not listed on IDEAS
    5. repec:kap:hcarem:v:20:y:2017:i:4:d:10.1007_s10729-016-9372-4 is not listed on IDEAS
    6. Gary D. Ferrier, 2014. "Improving the "usefulness" of stochastic frontier analysis for health care," Economics and Business Letters, Oviedo University Press, vol. 3(1), pages 27-34.
    7. Sommersguter-Reichmann, Margit & Stepan, Adolf, 2015. "The interplay between regulation and efficiency: Evidence from the Austrian hospital inpatient sector," Socio-Economic Planning Sciences, Elsevier, vol. 52(C), pages 10-21.
    8. Anthun, Kjartan Sarheim & Kittelsen, Sverre Andreas Campbell & Magnussen, Jon, 2017. "Productivity growth, case mix and optimal size of hospitals. A 16-year study of the Norwegian hospital sector," Health Policy, Elsevier, vol. 121(4), pages 418-425.
    9. repec:kap:hcarem:v:20:y:2017:i:2:d:10.1007_s10729-015-9350-2 is not listed on IDEAS
    10. Yang, Jinqiu & Zeng, Wu, 2014. "The trade-offs between efficiency and quality in the hospital production: Some evidence from Shenzhen, China," China Economic Review, Elsevier, vol. 31(C), pages 166-184.

    More about this item

    Keywords

    Double DEA; US hospitals; Quality of care; Technical efficiency; D24; I12; L25;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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