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

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  • 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
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    File URL: https://economics.uq.edu.au/files/38788/WP082022.pdf
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    Cited by:

    1. Zhichao Wang & Bao Hoang Nguyen & Valentin Zelenyuk, 2024. "Performance analysis of hospitals in Australia and its peers: a systematic and critical review," Journal of Productivity Analysis, Springer, vol. 62(2), pages 139-173, October.
    2. 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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