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Cost efficiency of US hospitals: a stochastic frontier approach

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  • Michael D. Rosko

    (School of Business Administration, Widener University, Chester, PA, USA)

Abstract

This study examined the impact of managed care and other environmental factors on hospital inefficiency in 1631 US hospitals during the period 1990-1996. A panel, stochastic frontier regression model was used to estimate inefficiency parameters and inefficiency scores. The results suggest that mean estimated inefficiency decreased by about 28% during the study period. Inefficiency was negatively associated with health maintenance organization (HMO) penetration and industry concentration. It was positively related with Medicare share and for-profit ownership status. Copyright © 2001 John Wiley & Sons, Ltd.

Suggested Citation

  • 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.
  • Handle: RePEc:wly:hlthec:v:10:y:2001:i:6:p:539-551
    DOI: 10.1002/hec.607
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    References listed on IDEAS

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