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Hospital productivity and the Norwegian ownership reform – A Nordic comparative study

Author

Listed:
  • Kittelsen, Sverre A.C.

    () (Ragnar Frisch Centre for Economic Research)

  • Magnussen, Jon

    (Department of Public Health and Community Medicine)

  • Sarheim Anthun, Kjartan

    (SINTEF Health Research)

  • Häkkinen, Unto

    (Centre for Health Economics)

  • Linna, Miika

    (Centre for Health Economics)

  • Medin, Emma

    (Medical Management Centre)

  • Olsen, Kim Rose

    (Danish Institute for Health Services Research)

  • Rehnberg, Clas

    (Medical Management Centre)

Abstract

In a period where decentralisation seemed to be the prominent trend, Norway in 2002 chose to re-centralise the hospital sector. The reform had three main aims; cost control, efficiency and reduced waiting times. This study investigates whether the hospital reform has improved hospital productivity using the other four major Nordic countries as controls. Hospital productivity measures are obtained using data envelopment analysis (DEA) on a comparable dataset of 728 Nordic hospitals in the period 1999 to 2004. First a common reference frontier is established for the four countries, enveloping the technologies of each of the countries and years. Bootstrapping techniques are applied to the obtained productivity estimates to assess uncertainty and correct for bias. Second, these are regressed on a set of explanatory variables in order to separate the effect of the hospital reform from the effects of other structural, financial and organizational variables. A fixed hospital effect model is used, as random effects and OLS specifications are rejected. Robustness is examined through alternate model specifications, including stochastic frontier analysis (SFA). The SFA approach in performed using the Battese & Coelli (1995) one stage procedure where the inefficiency term is estimated as a function of the set of explanatory variables used in the second stage in the DEA approach. Results indicate that the hospital reform in Norway seems to have improved the level of productivity in the magnitude of approximately 4 % or more. While there are small or contradictory estimates of the effects of case mix and activity based financing, the length of stay is clearly negatively associated with estimated productivity. Results are robust to choice of efficiency estimation technique and various definition of when the reform effect takes place.

Suggested Citation

  • Kittelsen, Sverre A.C. & Magnussen, Jon & Sarheim Anthun, Kjartan & Häkkinen, Unto & Linna, Miika & Medin, Emma & Olsen, Kim Rose & Rehnberg, Clas, 2009. "Hospital productivity and the Norwegian ownership reform – A Nordic comparative study," HERO On line Working Paper Series 2008:10, Oslo University, Health Economics Research Programme.
  • Handle: RePEc:hhs:oslohe:2008_010
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    File URL: http://www.hero.uio.no/publicat/2008/2008_10.pdf
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    Cited by:

    1. Emma Medin & Kjartan Anthun & Unto Häkkinen & Sverre Kittelsen & Miika Linna & Jon Magnussen & Kim Olsen & Clas Rehnberg, 2011. "Cost efficiency of university hospitals in the Nordic countries: a cross-country analysis," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 12(6), pages 509-519, December.
    2. Sverre Kittelsen & Benny Winsnes & Kjartan Anthun & Fanny Goude & Øyvind Hope & Unto Häkkinen & Birgitte Kalseth & Jannie Kilsmark & Emma Medin & Clas Rehnberg & Hanna Rättö, 2015. "Decomposing the productivity differences between hospitals in the Nordic countries," Journal of Productivity Analysis, Springer, vol. 43(3), pages 281-293, June.
    3. Miika Linna & Unto Häkkinen & Mikko Peltola & Jon Magnussen & Kjartan Anthun & Sverre Kittelsen & Annette Roed & Kim Olsen & Emma Medin & Clas Rehnberg, 2010. "Measuring cost efficiency in the Nordic Hospitals—a cross-sectional comparison of public hospitals in 2002," Health Care Management Science, Springer, vol. 13(4), pages 346-357, December.
    4. Pınar Kaya Samut & Reyhan Cafrı, 2016. "Analysis of the Efficiency Determinants of Health Systems in OECD Countries by DEA and Panel Tobit," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 129(1), pages 113-132, October.

    More about this item

    Keywords

    Efficiency; productivity; DEA; SFA; hospitals;

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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