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Scope and scale inefficiencies in physician practices

Author

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  • Robert Rosenman

    (Department of Economics, Washington State University, USA)

  • Daniel Friesner

    (School of Business Administration, Gonzaga University, USA)

Abstract

Using a national data set, this paper looks at the efficiency of physician practices, focusing on scopes of service by comparing single specialty groups and multispecialty groups. An analysis of efficiency using DEA indicates that there are scope inefficiencies from combining different types of providers into a single practice. Most of the inefficiency is due to technical rather than allocative reasons. In addition, we find that larger practices are able to capture efficiencies of scope, but incur inefficiencies of scale. Copyright © 2004 John Wiley & Sons, Ltd.

Suggested Citation

  • Robert Rosenman & Daniel Friesner, 2004. "Scope and scale inefficiencies in physician practices," Health Economics, John Wiley & Sons, Ltd., vol. 13(11), pages 1091-1116.
  • Handle: RePEc:wly:hlthec:v:13:y:2004:i:11:p:1091-1116
    DOI: 10.1002/hec.882
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Daniel Friesner & Ron Mittelhammer & Robert Rosenmane, 2006. "Inferring the Latent Incidence of Inefficiency from DEA Estimates and Bayesian Priors," Working Papers 2006-8, School of Economic Sciences, Washington State University.
    2. 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.
    3. Cordero Ferrera, Jose Manuel & Alonso Morán, Edurne & Nuño Solís, Roberto & Orueta, Juan F. & Souto Arce, Regina, 2013. "Efficiency assessment of primary care providers: A conditional nonparametric approach," MPRA Paper 51926, University Library of Munich, Germany.
    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. Obure, Carol Dayo & Jacobs, Rowena & Guinness, Lorna & Mayhew, Susannah & Vassall, Anna, 2016. "Does integration of HIV and sexual and reproductive health services improve technical efficiency in Kenya and Swaziland? An application of a two-stage semi parametric approach incorporating quality me," Social Science & Medicine, Elsevier, vol. 151(C), pages 147-156.
    6. John Schneider & Pengxiang Li & Donald Klepser & N. Peterson & Timothy Brown & Richard Scheffler, 2008. "The effect of physician and health plan market concentration on prices in commercial health insurance markets," International Journal of Health Economics and Management, Springer, vol. 8(1), pages 13-26, March.
    7. Grace Lordan, 2007. "Measuring efficiency in health care: an application to out of hours primary care services in the island of Ireland," Health, Econometrics and Data Group (HEDG) Working Papers 07/08, HEDG, c/o Department of Economics, University of York.
    8. King, Robyn & Green, Peter, 2012. "Governance of primary healthcare practices: Australian insights," Business Horizons, Elsevier, vol. 55(6), pages 593-608.
    9. Luis Murillo-Zamorano & Carmelo Petraglia, 2011. "Technical efficiency in primary health care: does quality matter?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 12(2), pages 115-125, April.
    10. repec:eee:jhecon:v:55:y:2017:i:c:p:76-94 is not listed on IDEAS
    11. Filipe Amado, Carla Alexandra & Dyson, Robert G., 2008. "On comparing the performance of primary care providers," European Journal of Operational Research, Elsevier, vol. 185(3), pages 915-932, March.
    12. Rajitkanok Puenpatom & Robert Rosenman, 2008. "Efficiency of Thai provincial public hospitals during the introduction of universal health coverage using capitation," Health Care Management Science, Springer, vol. 11(4), pages 319-338, December.
    13. Cordero, José Manuel & Alonso-Morán, Edurne & Nuño-Solinis, Roberto & Orueta, Juan F. & Arce, Regina Sauto, 2015. "Efficiency assessment of primary care providers: A conditional nonparametric approach," European Journal of Operational Research, Elsevier, vol. 240(1), pages 235-244.
    14. Matthias Staat, 2011. "Estimating the efficiency of general practitioners controlling for case mix and outlier effects," Empirical Economics, Springer, vol. 40(2), pages 321-342, April.
    15. José Cordero Ferrera & Eva Cebada & Luis Murillo Zamorano, 2014. "The effect of quality and socio-demographic variables on efficiency measures in primary health care," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 15(3), pages 289-302, April.
    16. M. C. Gouveia & L. C. Dias & C. H. Antunes & M. A. Mota & E. M. Duarte & E. M. Tenreiro, 2016. "An application of value-based DEA to identify the best practices in primary health care," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 38(3), pages 743-767, July.
    17. Daniel Friesner & Matthew McPherson & Robert Rosenman, 2006. "Are Hospitals Seasonally Inefficient? Evidence from Washington State Hospitals," Working Papers 2006-3, School of Economic Sciences, Washington State University.
    18. Pelone, Ferruccio & Kringos, Dionne Sofia & Valerio, Luca & Romaniello, Alessandro & Lazzari, Agnese & Ricciardi, Walter & de Belvis, Antonio Giulio, 2012. "The measurement of relative efficiency of general practice and the implications for policy makers," Health Policy, Elsevier, vol. 107(2), pages 258-268.
    19. 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.
    20. 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.
    21. Olga Milliken & Rose Anne Devlin & Vicky Barham & William Hogg & Simone Dahrouge & Grant Russell, 2008. "Comparative Efficiency Assessment of Primary Care Models Using Data Envelopment Analysis," Working Papers 0802E, University of Ottawa, Department of Economics.
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    23. repec:pal:jorsoc:v:60:y:2009:i:11:d:10.1057_jors.2008.160 is not listed on IDEAS
    24. repec:kap:hcarem:v:21:y:2018:i:1:d:10.1007_s10729-016-9378-y is not listed on IDEAS
    25. Friesner, Daniel & Mittelhammer, Ron & Rosenman, Robert, 2013. "Inferring the incidence of industry inefficiency from DEA estimates," European Journal of Operational Research, Elsevier, vol. 224(2), pages 414-424.

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