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Cost efficiency in primary care contracting: A stochastic frontier cost function approach

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Abstract

The principal aim of this paper is to estimate a stochastic frontier cost function and an inefficiency effects model in the analysis of the primary health care services purchased by the public authority and supplied by 180 providers in 1996 in Catalonia. The evidence from our sample does not support the premise that contracting out has helped improve purchasing cost efficiency in primary care. Inefficient purchasing cost was observed in the component of this purchasing cost explicitly included in the contract between purchaser and provider. There are no observable incentives for the contracted-out primary health care teams to minimise prescription costs, which are not explicitly included in the present contracting system.

Suggested Citation

  • Jaume Puig & Vicente Ortún, 2003. "Cost efficiency in primary care contracting: A stochastic frontier cost function approach," Economics Working Papers 719, Department of Economics and Business, Universitat Pompeu Fabra.
  • Handle: RePEc:upf:upfgen:719
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    References listed on IDEAS

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    6. Jondrow, James & Knox Lovell, C. A. & Materov, Ivan S. & Schmidt, Peter, 1982. "On the estimation of technical inefficiency in the stochastic frontier production function model," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 233-238, August.
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    Cited by:

    1. Roberta Longo & Claire Hulme & Andrew Smith, 2012. "Measures of Performance in Primary Care - a Review of Efficiency Studies," Working Papers 1203, Academic Unit of Health Economics, Leeds Institute of Health Sciences, University of Leeds.
    2. William Griffiths & Xiaohui Zhang & Xueyan Zhao, 2010. "A Stochastic Frontier Model for Discrete Ordinal Outcomes: A Health Production Function," Department of Economics - Working Papers Series 1092, The University of Melbourne.
    3. Luis Murillo-Zamorano & Carmelo Petraglia, 2011. "Technical efficiency in primary health care: does quality matter?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 12(2), pages 115-125, April.
    4. Thanassoulis, Emmanuel & Silva Portela, Maria C.A. & Graveney, Mike, 2014. "Using DEA to estimate potential savings at GP units at medical specialty level," Socio-Economic Planning Sciences, Elsevier, vol. 48(1), pages 38-48.
    5. Rafael Mu-oz de Bustillo & José-Ignacio Antón, 2013. "Those were the days, my friend: The public sector and the economic crisis in Spain," Chapters,in: Public Sector Shock, chapter 13, pages 511-542 Edward Elgar Publishing.
    6. Stefan Felder & Harald Tauchmann, 2013. "Federal state differentials in the efficiency of health production in Germany: an artifact of spatial dependence?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 14(1), pages 21-39, February.
    7. William Griffiths & Xiaohui Zhang & Xueyan Zhao, 2014. "Estimation and efficiency measurement in stochastic production frontiers with ordinal outcomes," Journal of Productivity Analysis, Springer, vol. 42(1), pages 67-84, August.
    8. Thanassoulis, Emmanuel & Silva Portela, Maria C.A. & Graveney, Mike, 2012. "Estimating the scope for savings in referrals and drug prescription costs in the general Practice units of a UK primary care trust," European Journal of Operational Research, Elsevier, vol. 221(2), pages 432-444.
    9. Sørensen, Torben H. & Olsen, Kim R. & Gyrd-Hansen, Dorte, 2009. "Differences in general practice initiated expenditures across Danish local health authorities--A multilevel analysis," Health Policy, Elsevier, vol. 92(1), pages 35-42, September.
    10. World Bank, 2009. "Serbia - Baseline Survey on Cost and Efficiency in Primary Health Care Centers Before Provider Payment Reforms," World Bank Other Operational Studies 3036, The World Bank.
    11. Pedro Barros & Sara Machado, 2010. "Money for nothing?," Health Care Management Science, Springer, vol. 13(3), pages 234-255, September.

    More about this item

    Keywords

    Primary health care; purchasing cost efficiency; frontier models;

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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