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Competition, Profit Incentives, and Technical Efficiency in the Provision of Nuclear Medicine Services

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  • George W. Wilson
  • Joseph M. Jadlow

Abstract

This study tests several hypotheses about the relative efficiency of proprietary and nonprofit hospitals in the provision of nuclear medicine services. It also examines the effects that service rivalry among hospitals has on technical efficiency. Linear programming techniques and regression analysis are applied to data from over 900 proprietary, private nonprofit and government hospitals. The results indicate that proprietary hospitals are more efficient than all other types of hospitals and that government hospitals are less efficient than all other types. In addition, the findings support the hypothesis that hospitals in geographic markets with structures conducive to service rivalry tend to be less efficient than hospitals in markets that are less conducive to such rivalry.

Suggested Citation

  • George W. Wilson & Joseph M. Jadlow, 1982. "Competition, Profit Incentives, and Technical Efficiency in the Provision of Nuclear Medicine Services," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 472-482, Autumn.
    • Handle: RePEc:rje:bellje:v:13:y:1982:i:autumn:p:472-482
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    1. Gian Paolo Barbetta & Gilberto Turati & Angelo M. Zago, 2007. "Behavioral differences between public and private not‐for‐profit hospitals in the Italian national health service," Health Economics, John Wiley & Sons, Ltd., vol. 16(1), pages 75-96, January.
    2. Paula James, 2002. "Do Non-profit Enterprises Pay More For Their Labor Inputs? An Examination of Hospital Behavior," Working Papers 02-07, New York University, Leonard N. Stern School of Business, Department of Economics.
    3. Esso-hanam Atake, 2015. "Technical efficiency of public hospitals in Togo: A directional distance function approach," Economics Bulletin, AccessEcon, vol. 35(3), pages 1752-1764.
    4. Thanh An Nguyen Le & Anthony T. Lo Sasso, 2020. "Competition and market structure in the dental industry," International Journal of Health Economics and Management, Springer, vol. 20(2), pages 201-214, June.
    5. Villalonga, Belen, 2000. "Privatization and efficiency: differentiating ownership effects from political, organizational, and dynamic effects," Journal of Economic Behavior & Organization, Elsevier, vol. 42(1), pages 43-74, May.
    6. Ayhan Aydın, 2022. "Benchmarking healthcare systems of OECD countries: A DEA - based Malmquist Productivity Index Approach," Alphanumeric Journal, Bahadir Fatih Yildirim, vol. 10(1), pages 25-40, June.
    7. Chang, Hsihui & Cheng, Mei-Ai & Das, Somnath, 2004. "Hospital ownership and operating efficiency: Evidence from Taiwan," European Journal of Operational Research, Elsevier, vol. 159(2), pages 513-527, December.
    8. Dranove, David & White, William D, 1994. "Recent Theory and Evidence on Competition in Hospital Markets," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 3(1), pages 169-209, Spring.
    9. Berta, Paolo & Callea, Giuditta & Martini, Gianmaria & Vittadini, Giorgio, 2010. "The effects of upcoding, cream skimming and readmissions on the Italian hospitals efficiency: A population-based investigation," Economic Modelling, Elsevier, vol. 27(4), pages 812-821, July.
    10. Anup Malani & Tomas Philipson & Guy David, 2003. "Theories of Firm Behavior in the Nonprofit Sector. A Synthesis and Empirical Evaluation," NBER Chapters, in: The Governance of Not-for-Profit Organizations, pages 181-216, National Bureau of Economic Research, Inc.
    11. Joseph Jadlow, 1985. "Monopoly rent seeking under conditions of uncertainty," Public Choice, Springer, vol. 45(1), pages 73-87, January.
    12. Young Bong Chang & Vijay Gurbaxani, 2013. "An Empirical Analysis of Technical Efficiency: The Role of IT Intensity and Competition," Information Systems Research, INFORMS, vol. 24(3), pages 561-578, September.
    13. Sauer, Johannes & Gorton, Matthew & Davidova, Sophia, 2014. "Migration and Agricultural Efficiency," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 172684, Agricultural and Applied Economics Association.
    14. Gary D. Ferrier, 2014. "Improving the "usefulness" of stochastic frontier analysis for health care," Economics and Business Letters, Oviedo University Press, vol. 3(1), pages 27-34.
    15. Dusansky, Richard & Wilson, Paul W., 1995. "On the relative efficiency of alternative modes of producing a public sector output: The case of the developmentally disabled," European Journal of Operational Research, Elsevier, vol. 80(3), pages 608-618, February.
    16. Jerry Blomberg & Bo Jonsson, 2011. "Evaluating the efficiency of the global primary aluminum smelting industry: a data envelopment approach," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 24(1), pages 29-44, July.
    17. Asubonteng Rivers, Patrick & Bae, Sejong, 1999. "Hospital competition in major U.S. metropolitan areas: An empirical evidence," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 28(5), pages 597-606.
    18. Kesteloot, K. & Voet, N., 1998. "Incentives for cooperation in quality improvement among hospitals--the impact of the reimbursement system," Journal of Health Economics, Elsevier, vol. 17(6), pages 701-728, December.
    19. Paula James, 2002. "Is The Medical Arms Race Still Present In Today’s Managed Care Environment?," Working Papers 02-09, New York University, Leonard N. Stern School of Business, Department of Economics.
    20. Gillian Currie & Cam Donaldson & Mingshan Lu, 2003. "What Does Canada Profit from the For-Profit Debate on Health Care?," Canadian Public Policy, University of Toronto Press, vol. 29(2), pages 227-251, June.
    21. Louis De Alessi, 1989. "The Effect of Institutions on the Choices of Consumers and Providers of Health Care," Journal of Theoretical Politics, , vol. 1(4), pages 427-458, October.
    22. Chiao‐Lee Chu & Tung‐liang Chiang & Ray‐E Chang, 2011. "Hospital competition and inpatient services efficiency in Taiwan: a longitudinal study," Health Economics, John Wiley & Sons, Ltd., vol. 20(10), pages 1268-1280, October.

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