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An Analysis of Efficiency and Productivity in Swiss Hospitals

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  • Mehdi Farsi
  • Massimo Filippini

Abstract

This paper examines the productive efficiency of the hospital sector in Switzerland. A panel data of 214 general hospitals over the four-year period between 1998 and 2001 has been analyzed. A descriptive analysis of the data casts some light on differences across hospital types especially regarding case mix severity and length of hospitalizations. The final sample used for the cost frontier analysis consists of 459 observations from 156 hospitals that is, an unbalanced panel with an average length of three years. The adopted methodology is based on a stochastic total cost frontier with a Cobb-Douglas functional form. Given the limited number of periods and the sample?s low within variation, a pooled cross-sectional model has been used. Several specifications have been considered. The main outputs are measured by the DRGadjusted number of hospitalizations and the hospital?s outpatient revenues. Services of capital, physicians and other employees are considered as input factors. The cost frontier analysis suggests a significant potential for improving efficiency. The results also point to unexploited scale economies in the majority of the sample. An analysis of inefficiency estimates indicates that the differences among various ownershipsubsidization types are not statistically significant.

Suggested Citation

  • Mehdi Farsi & Massimo Filippini, 2006. "An Analysis of Efficiency and Productivity in Swiss Hospitals," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 142(I), pages 1-37, March.
  • Handle: RePEc:ses:arsjes:2006-i-1
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    Cited by:

    1. Philippe Widmer, 2015. "Does prospective payment increase hospital (in)efficiency? Evidence from the Swiss hospital sector," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 16(4), pages 407-419, May.
    2. Philippe K. Widmer & George Elias & Peter Zweifel, 2012. "Improving efficiency through consolidation of jurisdictions? Evidence from the cantons of Switzerland," ECON - Working Papers 085, Department of Economics - University of Zurich.
    3. Peter Rohner, 2013. "Identity Management for Health Professionals," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 5(1), pages 17-33, February.
    4. Mehdi Farsi, 2008. "The temporal variation of cost-efficiency in Switzerland’s hospitals: an application of mixed models," Journal of Productivity Analysis, Springer, vol. 30(2), pages 155-168, October.
    5. 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.
    6. 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.
    7. Growitsch, Christian & Jamasb, Tooraj & Wetzel, Heike, 2012. "Efficiency effects of observed and unobserved heterogeneity: Evidence from Norwegian electricity distribution networks," Energy Economics, Elsevier, vol. 34(2), pages 542-548.
    8. Silvio Daidone & Francesco D’Amico, 2009. "Technical efficiency, specialization and ownership form: evidences from a pooling of Italian hospitals," Journal of Productivity Analysis, Springer, vol. 32(3), pages 203-216, December.
    9. Heike Wetzel, 2008. "Productivity Growth in European Railways: Technological Progress,Efficiency Change and Scale Effects," Working Paper Series in Economics 101, University of Lüneburg, Institute of Economics.
    10. Marta Zieba, 2011. "An Analysis of Technical Efficiency and Efficiency Factors for Austrian and Swiss Non-Profit Theatres," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 147(II), pages 233-274, June.
    11. Kim, Taeyoung & Cho, Seong-Hoon & Larson, Eric R. & Armsworth, Paul R., 2014. "Protected area acquisition costs show economies of scale with area," Ecological Economics, Elsevier, vol. 107(C), pages 122-132.
    12. Philippe K Widmer & Peter Zweifel & Mehdi Farsi, 2010. "Accounting For Heterogeneity In The Measurement of Hospital Performance," Economics Discussion / Working Papers 10-21, The University of Western Australia, Department of Economics.
    13. repec:spr:annopr:v:247:y:2016:i:2:d:10.1007_s10479-014-1710-7 is not listed on IDEAS
    14. Philippe K. Widmer & Peter Zweifel, 2008. "Public Good Provision in a Federalist Country: Tiebout Competition, Fiscal Equalization, and Incentives for Efficiency in Switzerland," SOI - Working Papers 0804, Socioeconomic Institute - University of Zurich, revised Dec 2010.
    15. Annika Herr, 2008. "Cost and technical efficiency of German hospitals: does ownership matter?," Health Economics, John Wiley & Sons, Ltd., vol. 17(9), pages 1057-1071.
    16. Reto Schleiniger, 2008. "Regional Quantity, Productivity and Efficiency Measures of the Swiss Health Care System," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 144(III), pages 459-476, September.
    17. Hiroshi Aiura, 2013. "Inter-regional competition and quality in hospital care," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 14(3), pages 515-526, June.
    18. Massimo Filippini & Nevenka Hrovatin & Jelena Zorić, 2008. "Cost efficiency of Slovenian water distribution utilities: an application of stochastic frontier methods," Journal of Productivity Analysis, Springer, vol. 29(2), pages 169-182, April.

    More about this item

    Keywords

    Stochastic Frontier; Cost Efficiency; General Hospitals;

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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