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Output Efficiency of Health Maintenance Organizations in Florida

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  • Robert Rosenman
  • Kris Siddharthan
  • Melissa Ahern

Abstract

We use data envelopment analysis (DEA) to measure the relative technical efficiencies of 28 HMOs licensed to practice in the State of Florida in the autumn of 1994. Health care output measures used in the analysis are number of commercial, Medicare and Medicaid members enrolled in each plan. Inputs to the model are capital assets, total expenditures on the provision of medical services and administrative expenses. We find differences in HMO efficiency scores and loss ratios (defined as the ratio of expenses on the provision of medical services to the total expenses incurred by the organization) across individual plans. Differences in efficiency measures across model type (staff, IPA, combination) and ownership types (for‐profit, not‐for‐profit) are small but significant: staff models and for‐profits are more efficient. In a multivariate model, we also find that large HMOs are more efficient and HMOs with Medicaid patients are significantly less efficient than other HMOs. © 1997 by John Wiley & Sons, Ltd.

Suggested Citation

  • Robert Rosenman & Kris Siddharthan & Melissa Ahern, 1997. "Output Efficiency of Health Maintenance Organizations in Florida," Health Economics, John Wiley & Sons, Ltd., vol. 6(3), pages 295-302, May.
  • Handle: RePEc:wly:hlthec:v:6:y:1997:i:3:p:295-302
    DOI: 10.1002/(SICI)1099-1050(199705)6:3<295::AID-HEC265>3.0.CO;2-#
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    File URL: https://doi.org/10.1002/(SICI)1099-1050(199705)6:33.0.CO;2-#
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    References listed on IDEAS

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    Cited by:

    1. R. Amy Puenpatom & Robert Rosenman, 2006. "Efficiency of Thai provincial public hospitals after the introduction of National Health Insurance Program," Working Papers 2006-2, School of Economic Sciences, Washington State University.
    2. Monica Giancotti & Annamaria Guglielmo & Marianna Mauro, 2017. "Efficiency and optimal size of hospitals: Results of a systematic search," PLOS ONE, Public Library of Science, vol. 12(3), pages 1-40, March.
    3. George Fragkiadakis & Michael Doumpos & Constantin Zopounidis & Christophe Germain, 2016. "Operational and economic efficiency analysis of public hospitals in Greece," Annals of Operations Research, Springer, vol. 247(2), pages 787-806, December.
    4. Brenda Gannon, 2005. "Testing for Variation in Technical Efficiency of Hospitals in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 36(3), pages 273-294.
    5. Boyce, John R. & Hollis, Aidan, 2005. "Governance of electricity transmission systems," Energy Economics, Elsevier, vol. 27(2), pages 237-255, March.
    6. Palazzolo, Jennifer R. & Ozcan, Yasar A., 2018. "Do the most efficient accountable care organizations earn shared savings?," Socio-Economic Planning Sciences, Elsevier, vol. 63(C), pages 12-17.
    7. 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.
    8. George Fragkiadakis & Michael Doumpos & Constantin Zopounidis & Christophe Germain, 2016. "Operational and economic efficiency analysis of public hospitals in Greece," Post-Print hal-01414677, HAL.
    9. Douglas Wholey & John Engberg & Cindy Bryce, 2006. "A descriptive analysis of average productivity among health maintenance organizations, 1985 to 2001," Health Care Management Science, Springer, vol. 9(2), pages 189-206, May.
    10. Stone, Glenda & Simmons, Walter O., 2002. "Relative Efficiency in the Spatial Distribution of Physicians' Services," The Review of Regional Studies, Southern Regional Science Association, vol. 32(2), pages 325-334, Summer/Fa.
    11. Donal. G. McKillop & J. Colin Glass & Christine A. Kerr & Gillian McCallion, 1999. "Efficiency in Northern Ireland Hospitals - A Non-parametric Analysis," The Economic and Social Review, Economic and Social Studies, vol. 30(2), pages 175-196.
    12. Andrew Worthington, 1999. "An Empirical Survey Of Frontier Efficiency Measurement Techniques In Healthcare Services," School of Economics and Finance Discussion Papers and Working Papers Series 067, School of Economics and Finance, Queensland University of Technology.

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