IDEAS home Printed from https://ideas.repec.org/p/ags/saea12/119725.html
   My bibliography  Save this paper

Efficiency Analysis of Rural Hospitals: Parametric and Semi-parametric Approaches

Author

Listed:
  • Nedelea, I. Cristian
  • Fannin, James Matthew

Abstract

This paper examined cost efficiency differences between rural hospitals participating in the Critical Access Hospital (CAH) Program and a group of non-converting, prospectively paid rural hospitals using both a two-stage semi-parametric approach as well as stochastic frontier analysis (SFA). CAHs receive Medicare cost-based reimbursement, in contrast with the rest of the hospitals reimbursed under Medicare prospective payment system (PPS). However, cost-based reimbursement has been associated with inefficiency in hospital operations and, consequently, concerns have been raised about the efficiency of CAHs. Results showed a positive and significant effect of CAH status on cost inefficiency under both model specifications suggesting that CAHs were less cost efficient than non-converting rural hospitals.

Suggested Citation

  • Nedelea, I. Cristian & Fannin, James Matthew, 2012. "Efficiency Analysis of Rural Hospitals: Parametric and Semi-parametric Approaches," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 119725, Southern Agricultural Economics Association.
    • Handle: RePEc:ags:saea12:119725
    DOI: 10.22004/ag.econ.119725
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/119725/files/Nedelea_FanninSAEA2012.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.119725?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Schmidt, Peter & Sickles, Robin C, 1984. "Production Frontiers and Panel Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(4), pages 367-374, October.
    2. Paul E. McNamara, 1999. "Welfare Effects of Rural Hospitial Closures: A Nested Logit Analysis of the Demand for Rural Hospital Services," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(3), pages 686-691.
    3. 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.
    4. Miika Linna, 1998. "Measuring hospital cost efficiency with panel data models," Health Economics, John Wiley & Sons, Ltd., vol. 7(5), pages 415-427, August.
    5. Simar, Leopold & Wilson, Paul W., 2007. "Estimation and inference in two-stage, semi-parametric models of production processes," Journal of Econometrics, Elsevier, vol. 136(1), pages 31-64, January.
    6. 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, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Martijn Ludwig & Frits Merode & Wim Groot, 2010. "Principal agent relationships and the efficiency of hospitals," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 11(3), pages 291-304, June.
    2. 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.
    3. 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.
    4. Brigitte Dormont & Carine Milcent, 2004. "The sources of hospital cost variability," Health Economics, John Wiley & Sons, Ltd., vol. 13(10), pages 927-939, October.
    5. Cristian Nedelea, I. & Matthew Fannin, J., 2013. "Analyzing cost efficiency of Critical Access Hospitals," Journal of Policy Modeling, Elsevier, vol. 35(1), pages 183-195.
    6. 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.
    7. 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.
    8. Almas Heshmati, 2003. "Productivity Growth, Efficiency and Outsourcing in Manufacturing and Service Industries," Journal of Economic Surveys, Wiley Blackwell, vol. 17(1), pages 79-112, February.
    9. Oliver Tiemann & Jonas Schreyögg, 2012. "Changes in hospital efficiency after privatization," Health Care Management Science, Springer, vol. 15(4), pages 310-326, December.
    10. Oliver Tiemann & Jonas Schreyögg, 2012. "Changes in hospital efficiency after privatization," Health Care Management Science, Springer, vol. 15(4), pages 310-326, December.
    11. Sebastian Linde, 2023. "Hospital cost efficiency: an examination of US acute care inpatient hospitals," International Journal of Health Economics and Management, Springer, vol. 23(3), pages 325-344, September.
    12. Varabyova, Yauheniya & Schreyögg, Jonas, 2013. "International comparisons of the technical efficiency of the hospital sector: Panel data analysis of OECD countries using parametric and non-parametric approaches," Health Policy, Elsevier, vol. 112(1), pages 70-79.
    13. Cyril Chang & Jennifer Troyer, 2009. "The impact of TennCare on hospital efficiency," Health Care Management Science, Springer, vol. 12(3), pages 201-216, September.
    14. Stefan Meyer, 2015. "Payment schemes and cost efficiency: evidence from Swiss public hospitals," International Journal of Health Economics and Management, Springer, vol. 15(1), pages 73-97, March.
    15. repec:dau:papers:123456789/5426 is not listed on IDEAS
    16. Juan Piedra-Peña & Diego Prior, 2023. "Analyzing the effect of health reforms on the efficiency of Ecuadorian public hospitals," International Journal of Health Economics and Management, Springer, vol. 23(3), pages 361-392, September.
    17. Camilla Mastromarco & Lenka Stastna & Jana Votapkova, 2019. "Efficiency of hospitals in the Czech Republic: Conditional efficiency approach," Journal of Productivity Analysis, Springer, vol. 51(1), pages 73-89, February.
    18. Kristensen, Troels & Olsen, Kim Rose & Kilsmark, Jannie & Lauridsen, Jørgen T. & Pedersen, Kjeld Møller, 2012. "Economies of scale and scope in the Danish hospital sector prior to radical restructuring plans," Health Policy, Elsevier, vol. 106(2), pages 120-126.
    19. Roland Banya & Nicholas Biekpe, 2018. "Banking efficiency and its determinants in selected frontier african markets," Economic Change and Restructuring, Springer, vol. 51(1), pages 69-95, February.
    20. Kollerup, Anna & Wadmann, Sarah & Bek, Toke & Kjellberg, Jakob, 2022. "National clinical guidelines and treatment centralization do not guarantee consistency in healthcare delivery. A mixed-methods study of wet age-related macular degeneration treatment in Denmark," Health Policy, Elsevier, vol. 126(12), pages 1291-1302.
    21. Mike Tsionas & Marwan Izzeldin & Arne Henningsen & Evaggelos Paravalos, 2022. "Addressing endogeneity when estimating stochastic ray production frontiers: a Bayesian approach," Empirical Economics, Springer, vol. 62(3), pages 1345-1363, March.

    More about this item

    Keywords

    Community/Rural/Urban Development; Health Economics and Policy; Production Economics; Productivity Analysis; Public Economics; Research Methods/ Statistical Methods;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    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:ags:saea12:119725. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/saeaaea.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.