IDEAS home Printed from
   My bibliography  Save this article

Output Efficiency of Health Maintenance Organizations in Florida


  • Robert Rosenman
  • Kris Siddharthan
  • Melissa Ahern


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-#

    Download full text from publisher

    File URL:;2-#
    Download Restriction: no

    References listed on IDEAS

    1. Clarkson, Kenneth W, 1972. "Some Implications of Property Rights in Hospital Management," Journal of Law and Economics, University of Chicago Press, vol. 15(2), pages 363-384, October.
    2. Rajiv D. Banker & Robert F. Conrad & Robert P. Strauss, 1986. "A Comparative Application of Data Envelopment Analysis and Translog Methods: An Illustrative Study of Hospital Production," Management Science, INFORMS, vol. 32(1), pages 30-44, January.
    3. Zuckerman, Stephen & Hadley, Jack & Iezzoni, Lisa, 1994. "Measuring hospital efficiency with frontier cost functions," Journal of Health Economics, Elsevier, vol. 13(3), pages 255-280, October.
    4. Retchin, S.M. & Brown, B., 1990. "The quality of ambulatory care in Medicare health maintenance organizations," American Journal of Public Health, American Public Health Association, vol. 80(4), pages 411-415.
    5. Vitaliano, Donald F. & Toren, Mark, 1994. "Cost and efficiency in nursing homes: a stochastic frontier approach," Journal of Health Economics, Elsevier, vol. 13(3), pages 281-300, October.
    6. Kooreman, Peter, 1994. "Data envelopment analysis and parametric frontier estimation: complementary tools," Journal of Health Economics, Elsevier, vol. 13(3), pages 345-346, October.
    7. Kooreman, Peter, 1994. "Nursing home care in The Netherlands: a nonparametric efficiency analysis," Journal of Health Economics, Elsevier, vol. 13(3), pages 301-316, October.
    8. Newhouse, Joseph P., 1994. "Frontier estimation: How useful a tool for health economics?," Journal of Health Economics, Elsevier, vol. 13(3), pages 317-322, October.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    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.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:hlthec:v:6:y:1997:i:3:p:295-302. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley Content Delivery). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.