Abstract:
:A two-stage approach is used in a stochastic frontier analysis of the factors affecting hospital efficiency. In the first stage, a translog cost-function is used to estimate inefficiency scores. In the second stage, inefficiency scores are regressed against independent variables to test hypotheses that come from X-inefficiency Theory. The study was based on 1989 data for 195 Pennsylvania acute care hospitals. This data base was chosen because of the availability of patient-level severity of illness data, a measure of output that is not available from most data sources. The stochastic frontier analysis models estimated mean inefficiency scores that ranged from 0.075 to 0.180. The addition of the DRG case mix index (CMI) reduced estimated inefficiency by more than 50%. The incremental effect of a severity of illness variable to an equation with CMI was very small. The second-stage results suggest inefficiency and are inversely associated with regulatory pressures and industry concentration.
journal_name
J Med Systjournal_title
Journal of medical systemsauthors
Rosko MD,Chilingerian JAdoi
10.1023/a:1020823612156subject
Has Abstractpub_date
1999-02-01 00:00:00pages
57-71issue
1eissn
0148-5598issn
1573-689Xjournal_volume
23pub_type
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journal_title:Journal of medical systems
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