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Competition, Profit Incentives, and Technical Efficiency in the Provision of Nuclear Medicine Services

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  • George W. Wilson
  • Joseph M. Jadlow

Abstract

This study tests several hypotheses about the relative efficiency of proprietary and nonprofit hospitals in the provision of nuclear medicine services. It also examines the effects that service rivalry among hospitals has on technical efficiency. Linear programming techniques and regression analysis are applied to data from over 900 proprietary, private nonprofit and government hospitals. The results indicate that proprietary hospitals are more efficient than all other types of hospitals and that government hospitals are less efficient than all other types. In addition, the findings support the hypothesis that hospitals in geographic markets with structures conducive to service rivalry tend to be less efficient than hospitals in markets that are less conducive to such rivalry.

Suggested Citation

  • George W. Wilson & Joseph M. Jadlow, 1982. "Competition, Profit Incentives, and Technical Efficiency in the Provision of Nuclear Medicine Services," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 472-482, Autumn.
  • Handle: RePEc:rje:bellje:v:13:y:1982:i:autumn:p:472-482
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    References listed on IDEAS

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    1. Samet, Dov & Tauman, Yair, 1982. "The Determination of Marginal Cost Prices under a Set of Axioms," Econometrica, Econometric Society, vol. 50(4), pages 895-909, July.
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    Cited by:

    1. Gian Paolo Barbetta & Gilberto Turati & Angelo M. Zago, 2007. "Behavioral differences between public and private not-for-profit hospitals in the Italian national health service," Health Economics, John Wiley & Sons, Ltd., vol. 16(1), pages 75-96.
    2. Dusansky, Richard & Wilson, Paul W., 1995. "On the relative efficiency of alternative modes of producing a public sector output: The case of the developmentally disabled," European Journal of Operational Research, Elsevier, vol. 80(3), pages 608-618, February.
    3. Jerry Blomberg & Bo Jonsson, 2011. "Evaluating the efficiency of the global primary aluminum smelting industry: a data envelopment approach," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 24(1), pages 29-44, July.
    4. Asubonteng Rivers, Patrick & Bae, Sejong, 1999. "Hospital competition in major U.S. metropolitan areas: An empirical evidence," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 28(5), pages 597-606.
    5. Berta, Paolo & Callea, Giuditta & Martini, Gianmaria & Vittadini, Giorgio, 2010. "The effects of upcoding, cream skimming and readmissions on the Italian hospitals efficiency: A population-based investigation," Economic Modelling, Elsevier, vol. 27(4), pages 812-821, July.
    6. Kesteloot, K. & Voet, N., 1998. "Incentives for cooperation in quality improvement among hospitals--the impact of the reimbursement system," Journal of Health Economics, Elsevier, vol. 17(6), pages 701-728, December.
    7. Esso-hanam Atake, 2015. "Technical efficiency of public hospitals in Togo: A directional distance function approach," Economics Bulletin, AccessEcon, vol. 35(3), pages 1752-1764.
    8. Villalonga, Belen, 2000. "Privatization and efficiency: differentiating ownership effects from political, organizational, and dynamic effects," Journal of Economic Behavior & Organization, Elsevier, vol. 42(1), pages 43-74, May.
    9. Chang, Hsihui & Cheng, Mei-Ai & Das, Somnath, 2004. "Hospital ownership and operating efficiency: Evidence from Taiwan," European Journal of Operational Research, Elsevier, vol. 159(2), pages 513-527, December.
    10. Anup Malani & Tomas Philipson & Guy David, 2003. "Theories of Firm Behavior in the Nonprofit Sector. A Synthesis and Empirical Evaluation," NBER Chapters,in: The Governance of Not-for-Profit Organizations, pages 181-216 National Bureau of Economic Research, Inc.
    11. Joseph Jadlow, 1985. "Monopoly rent seeking under conditions of uncertainty," Public Choice, Springer, vol. 45(1), pages 73-87, January.
    12. Sauer, Johannes & Gorton, Matthew & Davidova, Sophia, 2014. "Migration and Agricultural Efficiency," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 172684, Agricultural and Applied Economics Association.
    13. 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.

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