IDEAS home Printed from https://ideas.repec.org/p/lug/wpaper/1203.html
   My bibliography  Save this paper

The impact of the institutional form on the cost efficiency of nursing homes

Author

Listed:
  • Laura Di Giorgio

    (Department of Economics, University of Lugano)

  • Massimo Filippini

    (Department of Economics, University of Lugano; ETH, Zurich, Switzerland)

  • Giuliano Masiero

    (Department of Economics and Technology Management, University of Bergamo, Italy; Department of Econonomics, University of Lugano, Switzerland)

Abstract

In Switzerland, nursing home services are mainly provided by regulated public and private nonprofit organizations. Some of them are created by local governments as foundations. This provides a unique setting to analyze the impact of the institutional form on the performance of nursing homes. We propose a model where the institutional form is represented as a legal constraint which affects managers in the decison-making process. Considering a sample of 44 Swiss Italian nursing homes over a 7-years period (1999-2005), we then disentangle persistent inefficiency due to differences in the institutional form from unobserved heterogeneity. The applied estimation strategy provides more accurate estimates of the impact of the institutional form on nursing homes efficiency, as compared to previous studies. Our results suggest that governmental nursing homes are more costly than private and public foundations. These results are consistent across different model specifications.

Suggested Citation

  • Laura Di Giorgio & Massimo Filippini & Giuliano Masiero, 2012. "The impact of the institutional form on the cost efficiency of nursing homes," Quaderni della facoltà di Scienze economiche dell'Università di Lugano 1203, USI Università della Svizzera italiana.
    • Handle: RePEc:lug:wpaper:1203
    as

    Download full text from publisher

    File URL: http://doc.rero.ch/lm.php?url=1000,42,6,20120314101245-RJ/wp1203.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Haskel, Jonathan & Sanchis, Amparo, 1995. "Privatisation and X-Inefficiency: A Bargaining Approach," Journal of Industrial Economics, Wiley Blackwell, vol. 43(3), pages 301-321, September.
    2. Mehdi Farsi & Massimo Filippini & Diego Lunati, 2008. "Economies of Scale and Efficiency Measurement in Switzerland's Nursing Homes," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 144(III), pages 359-378, September.
    3. Anke S. Kessler & Christoph Lülfesmann, 2002. "Monitoring and Productive Efficiency in Public and Private Firms," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 58(2), pages 167-187, February.
    4. Waldman, Donald M., 1982. "A stationary point for the stochastic frontier likelihood," Journal of Econometrics, Elsevier, vol. 18(2), pages 275-279, February.
    5. Oliver Hart & Andrei Shleifer & Robert W. Vishny, 1997. "The Proper Scope of Government: Theory and an Application to Prisons," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(4), pages 1127-1161.
    6. Tim Coelli & Sergio Perelman & Elliot Romano, 1999. "Accounting for Environmental Influences in Stochastic Frontier Models: With Application to International Airlines," Journal of Productivity Analysis, Springer, vol. 11(3), pages 251-273, June.
    7. Cameron,A. Colin & Trivedi,Pravin K., 2005. "Microeconometrics," Cambridge Books, Cambridge University Press, number 9780521848053, October.
    8. R. G. Evans, 1971. "'Behavioural' Cost Functions for Hospitals," Canadian Journal of Economics, Canadian Economics Association, vol. 4(2), pages 198-215, May.
    9. Mark G. Duggan, 2000. "Hospital Ownership and Public Medical Spending," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(4), pages 1343-1373.
    10. Chou, Shin-Yi, 2002. "Asymmetric information, ownership and quality of care: an empirical analysis of nursing homes," Journal of Health Economics, Elsevier, vol. 21(2), pages 293-311, March.
    11. Susan Rose-Ackerman, 1996. "Altruism, Nonprofits, and Economic Theory," Journal of Economic Literature, American Economic Association, vol. 34(2), pages 701-728, June.
    12. 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.
    13. Mehdi Farsi & Massimo Filippini, 2004. "An Empirical Analysis of Cost Efficiency in Non‐profit and Public Nursing Homes," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 75(3), pages 339-365, September.
    14. 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.
    15. Andrew Worthington & Brian Dollery, 2000. "Efficiency Measurement in the Local Public Sector: Econometric and Mathematical Programming Frontier Techniques," School of Economics and Finance Discussion Papers and Working Papers Series 078, School of Economics and Finance, Queensland University of Technology.
    16. Patrick W. Schmitz, 2001. "Partial Privatization and Incomplete Contracts: The Proper Scope of Government Reconsidered," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 57(4), pages 394-411, August.
    17. Kanika Kapur & Burton A. Weisbrod, 2000. "The Roles of Government and Nonprofit Suppliers in Mixed Industries," Public Finance Review, , vol. 28(4), pages 275-308, July.
    18. Grosskopf, S. & Valdmanis, V., 1987. "Measuring hospital performance : A non-parametric approach," Journal of Health Economics, Elsevier, vol. 6(2), pages 89-107, June.
    19. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    20. Greene, William, 2005. "Reconsidering heterogeneity in panel data estimators of the stochastic frontier model," Journal of Econometrics, Elsevier, vol. 126(2), pages 269-303, June.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Di Giorgio, Laura & Filippini, Massimo & Masiero, Giuliano, 2014. "Implications of global budget payment system on nursing home costs," Health Policy, Elsevier, vol. 115(2), pages 237-248.

    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. Di Giorgio, L. & Filippini, M. & Masiero, G., 2015. "Structural and managerial cost differences in nonprofit nursing homes," Economic Modelling, Elsevier, vol. 51(C), pages 289-298.
    2. Mehdi Farsi & Massimo Filippini & Diego Lunati, 2008. "Economies of Scale and Efficiency Measurement in Switzerland's Nursing Homes," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 144(III), pages 359-378, September.
    3. Jens Prüfer, 2011. "Competition And Mergers Among Nonprofits," Journal of Competition Law and Economics, Oxford University Press, vol. 7(1), pages 69-92.
    4. Iparraguirre, José Luis & Ma, Ruosi, 2015. "Efficiency in the provision of social care for older people. A three-stage Data Envelopment Analysis using self-reported quality of life," Socio-Economic Planning Sciences, Elsevier, vol. 49(C), pages 33-46.
    5. 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.
    6. Mamonov Mikhail E. & Parmeter Christopher F. & Prokhorov Artem B., 2022. "Dependence modeling in stochastic frontier analysis," Dependence Modeling, De Gruyter, vol. 10(1), pages 123-144, January.
    7. Annika Frohloff, 2007. "Cost and Technical Efficiency of German Hospitals – A Stochastic Frontier Analysis," Ruhr Economic Papers 0002, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    8. Frohloff, Annika, 2007. "Cost and Technical Efficiency of German Hospitals – A Stochastic Frontier Analysis," Ruhr Economic Papers 2, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    9. Glass, Anthony J. & Kenjegalieva, Karligash & Sickles, Robin C. & Weyman-Jones, Thomas, 2016. "The Spatial Efficiency Multiplier and Random Effects in Spatial Stochastic Frontier Models," Working Papers 16-002, Rice University, Department of Economics.
    10. repec:zbw:rwirep:0002 is not listed on IDEAS
    11. Andrews Antony & Emvalomatis Grigorios, 2024. "Efficiency Measurement in Healthcare: The Foundations, Variables, and Models – A Narrative Literature Review," Economics - The Open-Access, Open-Assessment Journal, De Gruyter, vol. 18(1), pages 1-24.
    12. Li, Hong-Zhou & Kopsakangas-Savolainen, Maria & Yan, Ming-Zhe & Wang, Jian-Lin & Xie, Bai-Chen, 2019. "Which provincial administrative regions in China should reduce their coal consumption? An environmental energy input requirement function based analysis," Energy Policy, Elsevier, vol. 127(C), pages 51-63.
    13. Li, Hong-Zhou & Kopsakangas-Savolainen, Maria & Xiao, Xing-Zhi & Tian, Zhen-Zhen & Yang, Xiao-Yuan & Wang, Jian-Lin, 2016. "Cost efficiency of electric grid utilities in China: A comparison of estimates from SFA–MLE, SFA–Bayes and StoNED–CNLS," Energy Economics, Elsevier, vol. 55(C), pages 272-283.
    14. Massimo Filippini & Nevenka Hrovatin & Jelena Zorić, 2008. "Cost efficiency of Slovenian water distribution utilities: an application of stochastic frontier methods," Journal of Productivity Analysis, Springer, vol. 29(2), pages 169-182, April.
    15. Cambini Carlo & Filippini Massimo & Piacenza Massimiliano & Vannoni Davide, 2011. "Corporatization and Firm Performance: Evidence from Publicly-Provided Local Utilities," Review of Law & Economics, De Gruyter, vol. 7(1), pages 191-213, July.
    16. Deng, Na-Qian & Liu, Li-Qiu & Deng, Ying-Zhi, 2018. "Estimating the effects of restructuring on the technical and service-quality efficiency of electricity companies in China," Utilities Policy, Elsevier, vol. 50(C), pages 91-100.
    17. Adugna Lemi & Ian Wright, 2020. "Exports, foreign ownership, and firm-level efficiency in Ethiopia and Kenya: an application of the stochastic frontier model," Empirical Economics, Springer, vol. 58(2), pages 669-698, February.
    18. N. Maniadakis & N. Kotsopoulos & P. Prezerakos & J. Yfantopoulos, 2009. "Health Care Services Performance Measurement: Theory, Methods and Empirical Evidence," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 151-170.
    19. 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.
    20. Banfi, Silvia & Filippini, Massimo, 2010. "Resource rent taxation and benchmarking--A new perspective for the Swiss hydropower sector," Energy Policy, Elsevier, vol. 38(5), pages 2302-2308, May.
    21. Mehdi Farsi & Aurelio Fetz & Massimo Filippini, 2007. "Benchmarking and Regulation in the Electricity Distribution Sector," CEPE Working paper series 07-54, CEPE Center for Energy Policy and Economics, ETH Zurich.

    More about this item

    Keywords

    constant inefficiency; unobserved heterogeneity; nursing homes; nonprofit; institutional form;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

    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:lug:wpaper:1203. 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: Alessio Tutino (email available below). General contact details of provider: https://www.bul.sbu.usi.ch .

    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.