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A Production Function For Physician Services Revisited

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  • Norman K Thurston
  • Anne M. Libby

Abstract

We revisit Reinhardt's (1972) commonly used production function for physician services. This production function, although appropriate in some settings, is not adequate for more detailed studies. The generalized linear production function (Diewart, 1971) is an attractive alternative for this application: it admits zero values for inputs and allows the estimation of complex technical relationships. We find that, from 1965-1988, the technical relationships that describe the production process for physician services are remarkably stable. By empirically estimating the parameters of this more general production function, we provide crucial evidence about the q-complementarity of health worker inputs, the first of its kind in the literature on health labor markets. © 2002 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology

Suggested Citation

  • Norman K Thurston & Anne M. Libby, 2002. "A Production Function For Physician Services Revisited," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 184-191, February.
  • Handle: RePEc:tpr:restat:v:84:y:2002:i:1:p:184-191
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    Citations

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    Cited by:

    1. Lukas Kwietniewski & Mareike Heimeshoff & Jonas Schreyögg, 2017. "Estimation of a physician practice cost function," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 18(4), pages 481-494, May.
    2. Sisira Sarma & Rose Anne Devlin & William Hogg, 2010. "Physician's production of primary care in Ontario, Canada," Health Economics, John Wiley & Sons, Ltd., vol. 19(1), pages 14-30.
    3. Andrew J. Epstein & Sean Nicholson & David A. Asch, 2013. "The Production of and Market for New Physicians' Skill," NBER Working Papers 18678, National Bureau of Economic Research, Inc.
    4. Theodore Stefos & James Burgess & Jeffrey Cohen & Laura Lehner & Eileen Moran, 2012. "Dynamics of the mental health workforce: investigating the composition of physicians and other health providers," Health Care Management Science, Springer, vol. 15(4), pages 373-384, December.
    5. Andrew J. Epstein & Sean Nicholson & David A. Asch, 2016. "The Production of and Market for New Physicians’ Skill," American Journal of Health Economics, MIT Press, vol. 2(1), pages 41-65, January.
    6. Timothy Gunning & Robin Sickles, 2011. "A multi-product cost function for physician private practices," Journal of Productivity Analysis, Springer, vol. 35(2), pages 119-128, April.
    7. Mareike Heimeshoff & Jonas Schreyögg & Lukas Kwietniewski, 2014. "Cost and technical efficiency of physician practices: a stochastic frontier approach using panel data," Health Care Management Science, Springer, vol. 17(2), pages 150-161, June.
    8. Maude Laberge & Walter P. Wodchis & Jan Barnsley & Audrey Laporte, 2016. "Efficiency of Ontario primary care physicians across payment models: a stochastic frontier analysis," Health Economics Review, Springer, vol. 6(1), pages 1-10, December.
    9. James F. Burgess, 2012. "Productivity Analysis in Health Care," Chapters,in: The Elgar Companion to Health Economics, Second Edition, chapter 34 Edward Elgar Publishing.
    10. Paul E. Brockway & Matthew K. Heun & João Santos & John R. Barrett, 2017. "Energy-Extended CES Aggregate Production: Current Aspects of Their Specification and Econometric Estimation," Energies, MDPI, Open Access Journal, vol. 10(2), pages 1-23, February.
    11. Firouz Gahvari, 2014. "Second-Best Taxation of Incomes and Non-Labor Inputs in a Model with Endogenous Wages," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 16(6), pages 917-935, December.
    12. repec:kap:hcarem:v:21:y:2018:i:1:d:10.1007_s10729-016-9378-y is not listed on IDEAS

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