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Managed care and technical efficiency

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  • H. Shelton Brown

Abstract

By focusing exclusively on consumer benefit, previous studies of the effects of managed care have ignored important hospital efficiency gains. This study uses the HCUP sample of hospitals for 1992–1996 to estimate a stochastic frontier model of hospital technical efficiency. After controlling for hospital and market area variables, the study finds strong evidence that increased managed care insurance in a given market is associated with improved technical efficiency in the area's hospitals, especially in tertiary cases. Using Battese and Coelli's one‐stage method (1995), the coefficients estimates are more efficient than for two‐stage methods found in the literature. Copyright © 2002 John Wiley & Sons, Ltd.

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  • H. Shelton Brown, 2003. "Managed care and technical efficiency," Health Economics, John Wiley & Sons, Ltd., vol. 12(2), pages 149-158, February.
    • Handle: RePEc:wly:hlthec:v:12:y:2003:i:2:p:149-158
    DOI: 10.1002/hec.712
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    1. H. Brown & José Pagán, 2006. "Managed care and the scale efficiency of US hospitals," International Journal of Health Economics and Management, Springer, vol. 6(4), pages 278-289, December.
    2. Nan Jiang & Antony Andrews, 2020. "Efficiency of New Zealand’s District Health Boards at Providing Hospital Services: A stochastic frontier analysis," Journal of Productivity Analysis, Springer, vol. 53(1), pages 53-68, February.
    3. 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.
    4. Eila Kankaanpää & Ismo Linnosmaa & Hannu Valtonen, 2011. "Public health care providers and market competition: the case of Finnish occupational health services," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 12(1), pages 3-16, February.
    5. 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, March.
    6. William Griffiths & Xiaohui Zhang & Xueyan Zhao, 2010. "A Stochastic Frontier Model for Discrete Ordinal Outcomes: A Health Production Function," Department of Economics - Working Papers Series 1092, The University of Melbourne.
    7. Roberto Colombi & Gianmaria Martini & Giorgio Vittadini, 2017. "Determinants of transient and persistent hospital efficiency: The case of Italy," Health Economics, John Wiley & Sons, Ltd., vol. 26(S2), pages 5-22, September.
    8. Deng, Zhongqi & Jiang, Nan & Pang, Ruizhi, 2021. "Factor-analysis-based directional distance function: The case of New Zealand hospitals," Omega, Elsevier, vol. 98(C).
    9. Bo Hsiao & Li‐Hsueh Chen & Huei‐Ting Wu, 2019. "Assessing performance of Taiwan hospitals using data envelopment analysis: In view of ownership," International Journal of Health Planning and Management, Wiley Blackwell, vol. 34(1), pages 602-616, January.
    10. Lukas Kwietniewski & Jonas Schreyögg, 2018. "Efficiency of physician specialist groups," Health Care Management Science, Springer, vol. 21(3), pages 409-425, September.
    11. See, Kok Fong & Ng, Ying Chu, 2021. "Do hospital reform and ownership matter to Shenzhen hospitals in China? A productivity analysis," Economic Analysis and Policy, Elsevier, vol. 72(C), pages 145-155.
    12. 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, September.
    13. Valentin Zelenyuk & Zhichao Wang, 2023. "Random vs. Explained Inefficiency in Stochastic Frontier Analysis: The Case of Queensland Hospitals," CEPA Working Papers Series WP052023, School of Economics, University of Queensland, Australia.
    14. Rize Jing & Tingting Xu & Xiaozhen Lai & Elham Mahmoudi & Hai Fang, 2019. "Technical Efficiency of Public and Private Hospitals in Beijing, China: A Comparative Study," IJERPH, MDPI, vol. 17(1), pages 1-18, December.
    15. Roxani Karagiannis & Michalis Hatziprokopiou, 2007. "Measuring and Explaining Technical Efficiency of Greek Public hospitals," Discussion Paper Series 2007_04, Department of Economics, University of Macedonia, revised Dec 2007.
    16. Tiemann, Oliver & Schreyögg, Jonas & Busse, Reinhard, 2012. "Hospital ownership and efficiency: A review of studies with particular focus on Germany," Health Policy, Elsevier, vol. 104(2), pages 163-171.
    17. William Griffiths & Xiaohui Zhang & Xueyan Zhao, 2014. "Estimation and efficiency measurement in stochastic production frontiers with ordinal outcomes," Journal of Productivity Analysis, Springer, vol. 42(1), pages 67-84, August.
    18. Hacer Özgen Narcı & Yasar A. Ozcan & İsmet Şahin & Menderes Tarcan & Mustafa Narcı, 2015. "An examination of competition and efficiency for hospital industry in Turkey," Health Care Management Science, Springer, vol. 18(4), pages 407-418, December.
    19. Lukas Kwietniewski & Jonas Schreyögg, 2018. "Profit efficiency of physician practices: a stochastic frontier approach using panel data," Health Care Management Science, Springer, vol. 21(1), pages 76-86, March.
    20. Kuan-Chen Chen & Hong-Ming Chen & Li-Nien Chien & Ming-Miin Yu, 2019. "Productivity growth and quality changes of hospitals in Taiwan: does ownership matter?," Health Care Management Science, Springer, vol. 22(3), pages 451-461, September.
    21. Germà Bel & Marc Esteve, 2018. "“Is Private Production of Hospital Services Cheaper than Public Production? A Meta-Regression of Public vs Private Costs and Efficiency for Hospitals”," IREA Working Papers 201824, University of Barcelona, Research Institute of Applied Economics, revised Oct 2018.

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