Al-Shammari, M. (1999). A Multi-Criteria Data Envelopment Analysis Model for Measuring the Productive Efficiency of Hospitals. International Journal of Operations and Production Management, 19(9), 879–891.
Abstract: This paper seeks to measure and evaluate the productive efficiency of health-care organizations (hospitals) using a multicriteria Data Envelopment Analysis (DEA) methodology. DEA is a special linear programming model for deriving the comparative efficiency of multiple-input multiple-output Decision-Making Units (DMUs). DEA provides management with information regarding the relatively best practice hospitals in the observation set and locates the relatively inefficient hospitals by comparison with the best practice ones. In addition, it indicates the magnitude of these inefficiencies. The paper selects a set of inputs and outputs for 15 hospitals for a three-year period. The hospital input measures included are: number of bed days, number of physicians, and number of health personnel. The output measures included are: number of patient days, number of minor operations, and number of major operations. The DEA models are solved using an IBM PC optimization modeling system called LINDO (linear, interactive, discrete optimizer).
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Aletras, V., Kontodimopoulos, N., Zagouldoudis, A., & Niakas, D. (2007). The Short-term Effect on Technical and Scale Efficiency of Establishing Regional Health Systems and General Management in Greek NHS Hospitals. Health Policy, 83(2-3), 236–245.
Abstract: Objectives The Greek National Health System has been subjected to a reform initiative in 2001. The new legislation required hospitals to operate as administrative and economic decentralized units, under the control of newly established Regional Health Systems. In addition, Professional Managers have been appointed and signed “efficiency contracts”, which supposedly committed them to run the hospitals effectively and efficiently. The present study aims at estimating the efficiency impact of this reform. Methods Data Envelopment Analysis was employed with included inputs being the number of medical staff employees, other hospital employees and staffed beds, whereas outputs were the case-mix adjusted inpatient cases, outpatient visits and surgical operations performed. The technical and scale efficiencies of a sample of 51 general acute National Health System hospitals have been comparatively examined before and after the reform. Results The analysis surprisingly indicates that technical and scale efficiency has been reduced following the policy changes. Conclusions It appears that the expected benefits from the reform have not in general been achieved, at least in the short-run. This result is examined in light of coexisting administrative and organizational factors, which are impeding the reform process.
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Ancarani, A., Di Mauro, C., & Giammanco, M. D. (2009). The impact of managerial and organizational aspects on hospital wards’ efficiency: Evidence from a case study. European Journal of Operational Research, 194(1), 280–293.
Abstract: In spite of its acknowledged relevance, the impact of managerial and organizational aspects on hospital wards’ efficiency has been so far overlooked by the literature. In order to explore this issue, this paper presents a model of the relations between the decision making process of a hospital ward and its technical efficiency. In order to test the model, a two-step approach has been adopted. In the first step the technical efficiency of wards belonging to a large Italian Hospital Enterprise has been calculated using DEA. In the second step, efficiency scores have been regressed on a set of variables capturing managerial goals and actions internal to the ward, as well as re-organizations imposed by the hospital central management. Responses to a questionnaire administered to the heads of ward were used to build the independent variables. Results show that both decisions internal to the ward and exogenous re-organizations affect the ward’s efficiency, and suggest that these variables are more significant in explaining efficiency than environmental ones.
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Athanassopoulos, A., & Gounaris, C. (2001). Assessing the technical and allocative efficiency of hospital operations in Greece and its resource allocation implications. European Journal of Operational Research, 133(2), 416–431.
Abstract: In this paper, we seek to develop a research framework concerning the assessment of the efficiency of public sector hospital operations. Public hospitals are increasingly under pressure to improve their operations both in terms of resources they use and also in terms of the quantity and quality of their outcomes. The assessment of efficiency entails both the notions of technical and allocative efficiency as they yield complementary information about the management effectiveness of individual hospitals. Technical efficiency has a diagnostic purpose as it yields comparative information about the effectiveness with which individual units convert their input resources into outputs. On the other hand allocative efficiency has a planning orientation since the objective of the assessment is to gauge efficiency improvements by means of resource reallocation. A linear programming based model is proposed for assessing allocative efficiency in the light of uncertainty about the prices of input factors. The empirical part of the paper is based on data from Greek public hospitals. Results and policy implications are discussed based on data from 98 general hospitals based on information from 1992. It was found that significant inefficiencies are present in the operations of Greek hospitals that account approximately for 100 MEcu in 1992 prices.
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Athanassopoulos, A. D., Gounaris, C., & Sissouras, A. (1999). A descriptive assessment of the production and cost efficiency of general hospitals in Greece. Health Care Management Science, 2(2), 97–106.
Abstract: This paper focuses on the assessment of alternative aspects of the efficiency of 98 out of 126 hospitals of the Greek national health system. The analysis is directly concerned with the degree of utilisation of resources and the production efficiency of the general hospitals selected. For the measurement of the indices of efficiency, the internationally known method of Data Envelopment Analysis (modified to the particular characteristics of the Greek NHS) was used. The efficiency of Greek hospitals was assessed utilising two alternative conceptual models: one focusing on production and the other on cost efficiency. The results, in both cases, indicated the scope for substantial efficiency improvements. The analysis has sought to discuss the policy implications resulting from the current efficiency status of the hospitals with reference to issues of resource re-allocation and optimal scale size.
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Banker, R. D., Conrad, R. F., & Strauss, R. P. (1986). A Comparative Application of Data Envelopment Analysis and Translog Methods: An Illustrative Study of Hospital Production. Management Science, 32(1), 30–44.
Abstract: This paper compares inferences about hospital cost and production correspondences from two different estimation models: (1) the econometric modeling of the translog cost function, and (2) the application of Data Envelopment Analysis (DEA). While there are numerous examples of the application of each approach to empirical data, this paper provides insights into the relative strengths of the estimation methods by applying both models to the same data. The translog results suggest that constant reruns are operant, whereas the DEA results suggest that both increasing and decreasing returns to scale may be observed in different segments of the production correspondence, in turn suggesting that the translog model may be averaging’ diametrically opposite behavior. On the other hand, by examining the rate of output transformation, both models agree that patient days devoted to care of children are more resource intensive than those devoted to adults or to the elderly. In addition, we compare estimates of technical efficiencies of individual hospitals obtained from the two methods. The DEA estimates are found to be highly related to the capacity utilization, but no such relationship was found for the translog estimates. This comparative application of different estimation models to the same data to obtain inferences about the nature of underlying cost and production correspondences sheds interesting light on the strengths of each approach, and suggests the need for additional research comparing estimation models using real as well as simulated data.
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Barbetta, G. P., Turati, G., & Zago, A. M. (2007). Behavioral Differences between Public and Private Not-for-Profit Hospitals in the Italian National Health Service. Health Economics, 16(1), 75–96.
Abstract: In this paper we attempt to identify behavioral differences between public and private not-for-profit hospitals, by exploiting the introduction of the DRG-based payment system in the Italian NHS during the second half of the 1990s. We estimate the technical efficiency of a sample of hospitals for the period 1995-2000 considering an output distance function, and adopting both parametric (COLS and SF) and nonparametric (DEA) approaches. Our results show a convergence of mean efficiency scores between not-for-profit and public hospitals, and seem to suggest that differences in economic performances between competing ownership forms are more the result of the institutional settings in which they operate than the effect of the incentive structures embedded in the different proprietary forms. We also observe a decline in technical efficiency, probably due to policies aimed at reducing hospitalization rates.
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Biørn, E., Hagen, T. P., Iversen, T., & Magnussen, J. (2003). The Effect of Activity-Based Financing on Hospital Efficiency: A Panel Data Analysis of DEA Efficiency Scores 1992–2000. Health Care Management Science, 6(4), 271–283.
Abstract: Activity-based financing (ABF) was implemented in the Norwegian hospital sector from 1 July 1997. A fraction (30 to 50 per cent) of the block grant from the state to the county councils has been replaced by a matching grant depending upon the number and composition of hospital treatments. As a result of the reform, the majority of county councils have introduced activity-based contracts with their hospitals. This paper studies the effect of activity-based funding on hospital efficiency. We predict that hospital efficiency will increase because the benefit from cost-reducing efforts in terms of number of treated patients is increased under ABF compared with global budgets. The prediction is tested using a panel data set from the period 1992-2000. Efficiency indicators are estimated by means of data envelopment analysis (DEA) with multiple inputs and outputs. Using a variety of econometric methods, we find that the introduction of ABF has improved efficiency when measured as technical efficiency according to DEA analysis. Contrary to our prediction, the result is less uniform with respect to the effect on cost-efficiency. We suggest several reasons why this prediction fails. Keywords are poor information of costs, production-oriented drive, tight factor markets and soft budget constraints.
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Brown, I. I. I. H. S., & Pagán, J. A. (2006). Managed care and the scale efficiency of us hospitals. International Journal of Health Care Finance and Economics, 6(4), 278–289.
Abstract: Managed care penetration has been partly responsible for slowing down increases in health care costs in recent years. This study uses a 1992-1996 Health Care Utilization Project sample of hospitals to analyze the relationship between managed care penetration in local insurance markets and hospital scale efficiency. After controlling for hospital and market area variables, we find that managed care insurance, particularly the preferred provider type, is associated with increases in hospital scale efficiency in tertiary cases. The results presented here are consistent with the view that managed care can lead to reductions in health cost inflation by controlling the diffusion of technology via improvements in the scale efficiency of hospitals.
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Cardinaels, E. (2009). Governance in non-for-profit hospitals: Effects of board members’ remuneration and expertise on CEO compensation. Health Policy, 93(1), 64–75.
Abstract: Although hospitals vary in terms of their governance structures, little research has focused on the effectiveness of these governance mechanisms through the study of executive contracting. Using a sample of 80 non-for-profit private hospitals in the Netherlands, I investigate whether differences in governance structures of hospitals are informative for explaining the variations in chief executive pay. After controlling for important economic determinants of CEO compensation in hospitals (i.e., type and size of the hospital, CEO type and job complexity, market conditions and performance attributes), the results suggest that CEOs on average earn more (1) when the hospital’s supervisory board members receive more remuneration (a higher absolute as well as an excessive remuneration) and (2) when supervisory board members have a lower level of expertise. The findings suggest that supervisory boards are more effective in controlling agency problems (i.e., aligning CEO pay to economic conditions) when their members have more expertise, but at the same time that the monitoring function is hampered when supervisory board members receive a large (excessive) remuneration.
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