The effectiveness–efficiency trade-off in health care: The case of hospitals in Lombardy, Italy

Gianmaria Martini, Paolo Berta, John Mullahy and Giorgio Vittadini ()

Regional Science and Urban Economics, 2014, vol. 49, issue C, 217-231

Abstract: We study the presence and the magnitudes of trade-offs between health outcomes and hospitals' efficiency using a data set from Lombardy, Italy, for the period 2008–2011. Our goal is to analyze whether the pressures for cost containment may affect hospital performance in terms of population health status. Unlike previous work in this area, we analyze hospitals at the ward level so comparisons can be made across more homogeneous treatments. We focus on two different health outcomes: mortality and readmission rates. We find that there is a trade-off between mortality rates and efficiency, as more efficient hospitals have higher mortality rates. We also find, however, that more efficient hospitals have lower readmission rates. Moreover, we show that focusing the analysis at the ward level is essential, since there is evidence of higher mortality rates in general medicine and surgery, while in oncology mortality is lower in more efficient hospitals. Furthermore, we find that consideration of spatial processes is important since mortality rates are higher for hospitals subject to high degree of horizontal competition, but lower for those hospitals having strong competition but high efficiency. This implies that the interplay of efficient resource allocation and hospital competition is important for the sustainability and effectiveness of regional health care systems.

Keywords: Health outcomes; Hospital efficiency; Trade-off effectiveness/efficiency (search for similar items in EconPapers)
JEL-codes: C51 I12 I18 R12 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:49:y:2014:i:c:p:217-231

DOI: 10.1016/j.regsciurbeco.2014.02.003

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