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Activity based funding reform and the performance of public hospitals: The Case of Queensland, Australia

Author

Listed:
  • Bao Hoang Nguyen

    (School of Economics and Centre for Efficiency and Productivity Analysis (CEPA) at The University of Queensland, Australia)

  • Shawna Grosskopf

    (Economics, School of Public Policy, Oregon State University, Corvallis, OR 97331, USA)

  • Jongsay Yong

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Parkville, Australia)

  • Valentin Zelenyuk

    (School of Economics and Centre for Efficiency and Productivity Analysis (CEPA) at The University of Queensland, Australia)

Abstract

This study investigates the impact of activity-based funding (ABF) on the performance of hospitals by exploiting a natural experiment that happened in the state of Queensland, Australia. To examine the outcome of the reform, we use both a simple measure of performance (the weighted average length of stay) and more sophisticated ones (the technical efficiency estimated from data envelopment analysis (DEA) models). We try to identify the causal effect of ABF on the technical efficiency of hospitals by incorporating difference-in-differences approach in the popular two-stage DEA framework. We find empirical evidence that ABF improves the technical efficiency of hospitals.

Suggested Citation

  • Bao Hoang Nguyen & Shawna Grosskopf & Jongsay Yong & Valentin Zelenyuk, 2022. "Activity based funding reform and the performance of public hospitals: The Case of Queensland, Australia," CEPA Working Papers Series WP082022, School of Economics, University of Queensland, Australia.
    • Handle: RePEc:qld:uqcepa:180
    as

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    File URL: https://economics.uq.edu.au/files/38788/WP082022.pdf
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    References listed on IDEAS

    as
    1. Jacobson, Louis S & LaLonde, Robert J & Sullivan, Daniel G, 1993. "Earnings Losses of Displaced Workers," American Economic Review, American Economic Association, vol. 83(4), pages 685-709, September.
    2. Louis S. Jacobson & Robert J. LaLonde & Daniel G. Sullivan, 1993. "Long-term earnings losses of high-seniority displaced workers," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 17(Nov), pages 2-20.
    3. Croissant, Yves & Millo, Giovanni, 2008. "Panel Data Econometrics in R: The plm Package," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 27(i02).
    4. Chowdhury, Hedayet & Zelenyuk, Valentin, 2016. "Performance of hospital services in Ontario: DEA with truncated regression approach," Omega, Elsevier, vol. 63(C), pages 111-122.
    5. Bao Hoang Nguyen & Valentin Zelenyuk, 2021. "Aggregate efficiency of industry and its groups: the case of Queensland public hospitals," Empirical Economics, Springer, vol. 60(6), pages 2795-2836, June.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Bao Hoang Nguyen & Zhichao Wang & Valentin Zelenyuk, 2023. "Efficiency of Queensland Public Hospitals via Spatial Panel Stochastic Frontier Models," CEPA Working Papers Series WP102023, School of Economics, University of Queensland, Australia.

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    More about this item

    Keywords

    Hospital effciency; Activity based funding; Healthcare reform; DEA; Differencein- Differences; Truncated regression.;
    All these keywords.

    JEL classification:

    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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