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Measurement of hospital efficiency, using a latent class stochastic frontier model

  • Carlos Pestana Barros
  • Ant�nio Gomes de Menezes
  • José Cabral Vieira

This article analyses the technical efficiency of Portuguese hospitals from 1997 to 2008 with the latent class frontier model, enabling the identification of different segments in the cost frontier. It is found that there are three statistically significant segments in the sample, leading to the conclusion that no common health policy can be applicable to all the hospitals analysed, calling rather for policies conceived for each hospital segment identified. The health policy based in the identified segments enables a more accurate and cost effective management of resources.

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Article provided by Taylor & Francis Journals in its journal Applied Economics.

Volume (Year): 45 (2013)
Issue (Month): 1 (January)
Pages: 47-54

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Handle: RePEc:taf:applec:45:y:2013:i:1:p:47-54
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  1. William Greene, 2003. "Distinguishing Between Heterogeneity and Inefficiency: Stochastic Frontier Analysis of the World Health Organization’s Panel Data on National Health Care Systems," Working Papers 03-10, New York University, Leonard N. Stern School of Business, Department of Economics.
  2. 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.
  3. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
  4. Nikolaos Maniadakis & Emmanuel Thanassoulis, 2000. "Assessing productivity changes in UK hospitals reflecting technology and input prices," Applied Economics, Taylor & Francis Journals, vol. 32(12), pages 1575-1589.
  5. David Parkin & Bruce Hollingsworth, 1997. "Measuring production efficiency of acute hospitals in Scotland, 1991-94: validity issues in data envelopment analysis," Applied Economics, Taylor & Francis Journals, vol. 29(11), pages 1425-1433.
  6. Luigi Siciliani, 2006. "Estimating Technical Efficiency in the Hospital Sector with Panel Data: A Comparison of Parametric and Non-Parametric Techniques," Applied Health Economics and Health Policy, Springer Healthcare | Adis, vol. 5(2), pages 99-116.
  7. Caves, Douglas W & Christensen, Laurits R, 1980. "The Relative Efficiency of Public and Private Firms in a Competitive Environment: The Case of Canadian Railroads," Journal of Political Economy, University of Chicago Press, vol. 88(5), pages 958-76, October.
  8. Luis Orea & Subal C. Kumbhakar, 2004. "Efficiency measurement using a latent class stochastic frontier model," Empirical Economics, Springer, vol. 29(1), pages 169-183, January.
  9. Matthias Staat, 2006. "Efficiency of hospitals in Germany: a DEA-bootstrap approach," Applied Economics, Taylor & Francis Journals, vol. 38(19), pages 2255-2263.
  10. L. Steinmann & P. Zweifel, 2003. "On the (in)efficiency of Swiss hospitals," Applied Economics, Taylor & Francis Journals, vol. 35(3), pages 361-370.
  11. Breyer, Friedrich, 1987. "The specification of a hospital cost function : A comment on the recent literature," Journal of Health Economics, Elsevier, vol. 6(2), pages 147-157, June.
  12. Klein, Benjamin & Crawford, Robert G & Alchian, Armen A, 1978. "Vertical Integration, Appropriable Rents, and the Competitive Contracting Process," Journal of Law and Economics, University of Chicago Press, vol. 21(2), pages 297-326, October.
  13. repec:tpr:qjecon:v:91:y:1977:i:2:p:241-61 is not listed on IDEAS
  14. Eulália Dalmau-Atarrodona & Jaume Puig-Junoy, 1998. "Market Structure and Hospital Efficiency: Evaluating Potential Effects of Deregulation in a National Health Service," Review of Industrial Organization, Springer, vol. 13(4), pages 447-466, August.
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