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An Analysis of Hospital Efficiency and Productivity Growth Using the Luenberger Productivity Indicator

  • Barros, Carlos Pestana

    ()

    (Universidade Técnica de Lisboa)

  • Menezes, Antonio

    ()

    (University of the Azores)

  • Vieira, José António Cabral

    ()

    (University of the Azores)

  • Peypoch, Nicolas

    ()

    (Université de Perpignan)

  • Solonandrasana, Bernardin

    ()

    (Université de Perpignan)

We analyze the efficiency and productivity growth of a representative sample of Portuguese hospitals from 1997 to 2004, using an innovative approach by employing the directional distance function and the Luenberger productivity indicator. The primary advantage of our approach is that both input contractions and output expansions are considered. Our model generates a productivity indicator that is decomposed into the usual constituents of productivity growth: technological change and efficiency change. The results show that, on average, Portuguese hospitals did not experience productivity growth during the period analyzed. In addition, the incidence of positive productivity growth across Portuguese hospitals was remarkably low.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2689.

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Length: 14 pages
Date of creation: Mar 2007
Date of revision:
Publication status: published in: Health Care Management Science, 2008, 11 (4), 373-381
Handle: RePEc:iza:izadps:dp2689
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  1. Bruce Hollingsworth & Andrew Street, 2006. "The market for efficiency analysis of health care organisations," Health Economics, John Wiley & Sons, Ltd., vol. 15(10), pages 1055-1059.
  2. Luenberger, David G., 1992. "Benefit functions and duality," Journal of Mathematical Economics, Elsevier, vol. 21(5), pages 461-481.
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  4. Eulália Dalmau-Atarrodona & Jaume Puig-Junoy, 1998. "Market Structure and Hospital Efficiency: Evaluating Potential Effects of Deregulation in a National Health Service," Review of Industrial Organization, Springer, vol. 13(4), pages 447-466, August.
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  7. 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.
  8. Varian, Hal R, 1984. "The Nonparametric Approach to Production Analysis," Econometrica, Econometric Society, vol. 52(3), pages 579-97, May.
  9. Unto Häkkinen, 2005. "The impact of changes in Finland's health care system," Health Economics, John Wiley & Sons, Ltd., vol. 14(S1), pages S101-S118.
  10. Banker, Rajiv D & Maindiratta, Ajay, 1988. "Nonparametric Analysis of Technical and Allocative Efficiencies in Production," Econometrica, Econometric Society, vol. 56(6), pages 1315-32, November.
  11. Morey, RC & Fine, DJ & Loree, SW, 1990. "Comparing the allocative efficiencies of hospitals," Omega, Elsevier, vol. 18(1), pages 71-83.
  12. 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.
  13. Valdmanis, Vivian, 1992. "Sensitivity analysis for DEA models : An empirical example using public vs. NFP hospitals," Journal of Public Economics, Elsevier, vol. 48(2), pages 185-205, July.
  14. Jean-Philippe Boussemart & Walter Briec & Kristiaan Kerstens & Jean-Christophe Poutineau, 2003. "Luenberger and Malmquist Productivity Indices: Theoretical Comparisons and Empirical Illustration," Bulletin of Economic Research, Wiley Blackwell, vol. 55(4), pages 391-405, October.
  15. Gary Ferrier & Michael Rosko & Vivian Valdmanis, 2006. "Analysis of uncompensated hospital care using a DEA model of output congestion," Health Care Management Science, Springer, vol. 9(2), pages 181-188, May.
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