Research Article
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Year 2016, Volume: 5 Issue: 1, 17 - 26, 30.03.2016
https://doi.org/10.17261/Pressacademia.2016116550

Abstract

References

  • Afriat, S.N. 1972, “Efficiency estimation of production functions”, International Economic Review, 13(3), pp.568–598.
  • Aigner, D.J. & Chu, S.F. 1968, “On estimating the industry production function”, American Economic Review, 58(4), pp.826–839.
  • Aigner, D.J., Lovell, C.A.K. & Schmidt, P. 1977, “Formulation and estimation of stochastic frontier production function models”, Journal of Econometrics, 6(1), pp.21–37.
  • Atilgan, E. 2015, “The Technical Efficiency of Outpatient Services In Turkish Public Hospitals: A Stochastic Frontier Estimation”, International Healthcare Management Conference (IHMC), Gümüşhane, Turkey (June 2015)
  • Battese, E. & Coelli, T. J. 1988, “Prediction of firm level technical inefficiencies with a generalized frontier production function and panel data”, Journal of Econometrics, 38, pp.387-399.
  • Battese, G. E. & Coelli, T. J. 1992, “Frontier Production Function, technical efficiency and panel data: with application to Paddy Farmers in India”, Journal of Productivity Analysis, 3, pp.153-169.
  • Battese, G. E., Coelli, T. J. & Colby, T.C. 1989, “Estimation of Frontier Production Functions and the Efficiencies of Indian Farms Using Panel Data from ICRISAT's Village Level Studies”, Journal of Quantitative Economics, 5(2), pp.327-48.
  • Battese, G.E. & Coelli, T. J. 1995, “A model for technical inefficiency effects in a stochastic frontier production function for panel data”, Empirical Economics, 20, pp.325–332.
  • Carey, K. 2003, “Hospital cost efficiency and system membership”, Inquiry, 40, pp.25-38.
  • Chirikos, T. & Sear, A. 2000, “Measuring hospital inefficiency: A comparison of two approaches”, Health Services Research, 34, pp.13891408.
  • Chirikos, T. 1998, “Identifying efficiently and economically operated hospitals: The prospects and pitfalls of applying frontier regression techniques”, Journal of Health Politics, Policy and Law, 23, pp.879-904.
  • Chirikos, T. 1998/1999, “Further evidence that hospital production is inefficient”. Inquiry, 35, pp.408-416.
  • Coelli, T. J., Estache, A., Perelman, S. & Trujillo, L. 2003, “A primer on efficiency measurement for utilities and transport regulators”, WBI Development Studies.
  • Coelli, T. J., Rao, D. S. P., O'Donnell, C. J. & Battese, G. E. 2005, “An introduction to efficiency and productivity analysis”, Springer Science & Business Media.
  • Deily, M. & McKay, N. 2005, “Comparing high- and low-performing hospitals using risk-adjusted excess mortality and cost inefficiency”, Health Care Management Review, 30, pp.347-360.
  • Deily, M. & McKay, N. 2006, “Cost inefficiency and mortality rates in Florida hospitals”, Health Economics, 15, pp.419-431.
  • Deily, M., McKay, N. & Dorner, F. 2001, “Exit and inefficiency: The effects of ownership type”, Journal of Human Resources, 35, pp.734-747.
  • Folland, S. & Hofler, R. 2001, “How reliable are hospital efficiency estimates? Exploiting the dual to homothetic production”, Health Economics, 10, pp.683-698.
  • Greene, W. H. 1980a, “Maximum likelihood estimation of econometric frontier functions”, Journal of Econometrics, 13(1), pp.27-56.
  • Greene, W. H. 1980b, “On the estimation of a flexible frontier production model”, Journal of Econometrics, 13(1), pp.101-115.
  • Kumbhakar, S. & Lovell, C. 2000, “Stochastic Frontier Analysis”, Cambridge: Cambridge University Press.
  • Li, T. & Rosenman, R. 2001, “Cost efficiency in Washington hospitals: A stochastic frontier approach using panel data”, Health Care Management Science, 4, pp.73-81.
  • Linna, M. 1998, “Measuring hospital cost efficiency with panel data models”, Health Economics, 7 (5), pp.415-427.
  • McKay, N., Deily, M. & Dorner, F. 2002/2003, “Ownership and changes in hospital inefficiency, 1986-1991”, INQUIRY: The Journal of Health Care Organization, Provision, and Financing, 39, pp.388-399.
  • Meeusen, W. & Van den Broeck, J. 1977, “Efficiency estimation from Cobb-Douglas production functions with composed error”, International Economic Review, 18(2), pp.435–444.
  • Pitt, M. M. & Lee, L. F. 1981, “The measurement and sources of technical inefficiency in the Indonesian weaving industry”, Journal of Development Economics, 9, pp.43-64.
  • Richmond, J. 1974, “Estimating the Efficiency of Production”, International Economic Review, 15(2), pp.515–521.
  • Rosko, M. & Chilingerian, J. 1999, “Estimating hospital inefficiency: Does case mix matter?” Journal of Medical Systems, 23, pp.57-71.
  • Rosko, M. & Mutter, R. 2008, “Stochastic Frontier Analysis of Hospital Inefficiency: A Review of Empirical Issues and an Assessment of Robustness”, Medical Care Research and Review, 65(2), pp.131–166.
  • Rosko, M. & Proenca, J. 2005, “Impact of network and system use on hospital X-inefficiency”, Health Care Management Review, 30, pp.6979.
  • Rosko, M. 1999, “Impact of internal and external environmental pressures on hospital inefficiency”, Health Care Management, Science, 2, pp.64-78.
  • Rosko, M. 2001a, “Cost efficiency of U.S. hospitals: A stochastic frontier approach”, Health Economics, 10, pp.539-551. doi: 10.1002/hec.607
  • Rosko, M. 2001b, “Impact of HMO penetration and other environmental factors on hospital X-inefficiency”, Medical Care Research and Review, 58, pp.430-454.
  • Stevenson, R. E. 1980, “Likelihood functions for generalized stochastic frontier estimation”, Journal of Econometrics, 13(1), pp.57-66.
  • Vitaliano, D. & Toren, M. 1996, “Hospital cost and efficiency in a regime of stringent regulation”, Eastern Economic Journal, 22, pp.161-173.
  • Winsten, C.B. 1957, “Discussion on Mr. Farrell’s Paper”, Journal of the Royal Statistical Society: Series A (General), 120(3), pp.282–284.
  • Worthington, A. 2004, “Frontier efficiency measurement in health care: a review of empirical techniques and selected applications”, Medical Care Research and Review, 61, pp.135-170.
  • Zuckerman, S., Hadley, J. & Iezzoni, L. 1994, “Measuring hospital efficiency with frontier cost functions”, Journal of Health Economics, 13, pp.255-280.

STOCHASTIC FRONTIER ANALYSIS OF HOSPITAL EFFICIENCY: DOES THE MODEL SPECIFICATION MATTER?

Year 2016, Volume: 5 Issue: 1, 17 - 26, 30.03.2016
https://doi.org/10.17261/Pressacademia.2016116550

Abstract

In this study, the technical efficiency of outpatient
service production of hospitals is analyzed by using the Stochastic Frontier
Analysis (SFA) with different model specifications. The purpose of the study is
to present the effects of different SFA model specifications on the
distribution of efficiency score and/or production function parameter
estimates. In the analysis, the data of 429 Turkish MoH hospitals for the years
2012, 2013 and 2014 is used. The results of this paper suggest that different
SFA specification, i.e. using Cobb-Douglas or Translog production technology
and/or using an error component model or technical efficiency effects model,
shifts the production function parameter estimates and the mean efficiency
scores. On the other hand, the efficiency scores estimated by different model
specifications are found to be highly correlated both in magnitude and rank
order. 

References

  • Afriat, S.N. 1972, “Efficiency estimation of production functions”, International Economic Review, 13(3), pp.568–598.
  • Aigner, D.J. & Chu, S.F. 1968, “On estimating the industry production function”, American Economic Review, 58(4), pp.826–839.
  • Aigner, D.J., Lovell, C.A.K. & Schmidt, P. 1977, “Formulation and estimation of stochastic frontier production function models”, Journal of Econometrics, 6(1), pp.21–37.
  • Atilgan, E. 2015, “The Technical Efficiency of Outpatient Services In Turkish Public Hospitals: A Stochastic Frontier Estimation”, International Healthcare Management Conference (IHMC), Gümüşhane, Turkey (June 2015)
  • Battese, E. & Coelli, T. J. 1988, “Prediction of firm level technical inefficiencies with a generalized frontier production function and panel data”, Journal of Econometrics, 38, pp.387-399.
  • Battese, G. E. & Coelli, T. J. 1992, “Frontier Production Function, technical efficiency and panel data: with application to Paddy Farmers in India”, Journal of Productivity Analysis, 3, pp.153-169.
  • Battese, G. E., Coelli, T. J. & Colby, T.C. 1989, “Estimation of Frontier Production Functions and the Efficiencies of Indian Farms Using Panel Data from ICRISAT's Village Level Studies”, Journal of Quantitative Economics, 5(2), pp.327-48.
  • Battese, G.E. & Coelli, T. J. 1995, “A model for technical inefficiency effects in a stochastic frontier production function for panel data”, Empirical Economics, 20, pp.325–332.
  • Carey, K. 2003, “Hospital cost efficiency and system membership”, Inquiry, 40, pp.25-38.
  • Chirikos, T. & Sear, A. 2000, “Measuring hospital inefficiency: A comparison of two approaches”, Health Services Research, 34, pp.13891408.
  • Chirikos, T. 1998, “Identifying efficiently and economically operated hospitals: The prospects and pitfalls of applying frontier regression techniques”, Journal of Health Politics, Policy and Law, 23, pp.879-904.
  • Chirikos, T. 1998/1999, “Further evidence that hospital production is inefficient”. Inquiry, 35, pp.408-416.
  • Coelli, T. J., Estache, A., Perelman, S. & Trujillo, L. 2003, “A primer on efficiency measurement for utilities and transport regulators”, WBI Development Studies.
  • Coelli, T. J., Rao, D. S. P., O'Donnell, C. J. & Battese, G. E. 2005, “An introduction to efficiency and productivity analysis”, Springer Science & Business Media.
  • Deily, M. & McKay, N. 2005, “Comparing high- and low-performing hospitals using risk-adjusted excess mortality and cost inefficiency”, Health Care Management Review, 30, pp.347-360.
  • Deily, M. & McKay, N. 2006, “Cost inefficiency and mortality rates in Florida hospitals”, Health Economics, 15, pp.419-431.
  • Deily, M., McKay, N. & Dorner, F. 2001, “Exit and inefficiency: The effects of ownership type”, Journal of Human Resources, 35, pp.734-747.
  • Folland, S. & Hofler, R. 2001, “How reliable are hospital efficiency estimates? Exploiting the dual to homothetic production”, Health Economics, 10, pp.683-698.
  • Greene, W. H. 1980a, “Maximum likelihood estimation of econometric frontier functions”, Journal of Econometrics, 13(1), pp.27-56.
  • Greene, W. H. 1980b, “On the estimation of a flexible frontier production model”, Journal of Econometrics, 13(1), pp.101-115.
  • Kumbhakar, S. & Lovell, C. 2000, “Stochastic Frontier Analysis”, Cambridge: Cambridge University Press.
  • Li, T. & Rosenman, R. 2001, “Cost efficiency in Washington hospitals: A stochastic frontier approach using panel data”, Health Care Management Science, 4, pp.73-81.
  • Linna, M. 1998, “Measuring hospital cost efficiency with panel data models”, Health Economics, 7 (5), pp.415-427.
  • McKay, N., Deily, M. & Dorner, F. 2002/2003, “Ownership and changes in hospital inefficiency, 1986-1991”, INQUIRY: The Journal of Health Care Organization, Provision, and Financing, 39, pp.388-399.
  • Meeusen, W. & Van den Broeck, J. 1977, “Efficiency estimation from Cobb-Douglas production functions with composed error”, International Economic Review, 18(2), pp.435–444.
  • Pitt, M. M. & Lee, L. F. 1981, “The measurement and sources of technical inefficiency in the Indonesian weaving industry”, Journal of Development Economics, 9, pp.43-64.
  • Richmond, J. 1974, “Estimating the Efficiency of Production”, International Economic Review, 15(2), pp.515–521.
  • Rosko, M. & Chilingerian, J. 1999, “Estimating hospital inefficiency: Does case mix matter?” Journal of Medical Systems, 23, pp.57-71.
  • Rosko, M. & Mutter, R. 2008, “Stochastic Frontier Analysis of Hospital Inefficiency: A Review of Empirical Issues and an Assessment of Robustness”, Medical Care Research and Review, 65(2), pp.131–166.
  • Rosko, M. & Proenca, J. 2005, “Impact of network and system use on hospital X-inefficiency”, Health Care Management Review, 30, pp.6979.
  • Rosko, M. 1999, “Impact of internal and external environmental pressures on hospital inefficiency”, Health Care Management, Science, 2, pp.64-78.
  • Rosko, M. 2001a, “Cost efficiency of U.S. hospitals: A stochastic frontier approach”, Health Economics, 10, pp.539-551. doi: 10.1002/hec.607
  • Rosko, M. 2001b, “Impact of HMO penetration and other environmental factors on hospital X-inefficiency”, Medical Care Research and Review, 58, pp.430-454.
  • Stevenson, R. E. 1980, “Likelihood functions for generalized stochastic frontier estimation”, Journal of Econometrics, 13(1), pp.57-66.
  • Vitaliano, D. & Toren, M. 1996, “Hospital cost and efficiency in a regime of stringent regulation”, Eastern Economic Journal, 22, pp.161-173.
  • Winsten, C.B. 1957, “Discussion on Mr. Farrell’s Paper”, Journal of the Royal Statistical Society: Series A (General), 120(3), pp.282–284.
  • Worthington, A. 2004, “Frontier efficiency measurement in health care: a review of empirical techniques and selected applications”, Medical Care Research and Review, 61, pp.135-170.
  • Zuckerman, S., Hadley, J. & Iezzoni, L. 1994, “Measuring hospital efficiency with frontier cost functions”, Journal of Health Economics, 13, pp.255-280.
There are 38 citations in total.

Details

Journal Section Articles
Authors

Emre Atilgan

Publication Date March 30, 2016
Published in Issue Year 2016 Volume: 5 Issue: 1

Cite

APA Atilgan, E. (2016). STOCHASTIC FRONTIER ANALYSIS OF HOSPITAL EFFICIENCY: DOES THE MODEL SPECIFICATION MATTER?. Journal of Business Economics and Finance, 5(1), 17-26. https://doi.org/10.17261/Pressacademia.2016116550

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