 Hospital efficiency and transaction costs: A stochastic frontier approachMartijn Ludwig, Wim Groot and Frits Van Merode Social Science & Medicine, 2009, vol. 69, issue 1, 61-67 Abstract: The make-or-buy decision of organizations is an important issue in the transaction cost theory, but is usually not analyzed from an efficiency perspective. Hospitals frequently have to decide whether to outsource or not. The main question we address is: Is the make-or-buy decision affected by the efficiency of hospitals? A one-stage stochastic cost frontier equation is estimated for Dutch hospitals. The make-or-buy decisions of ten different hospital services are used as explanatory variables to explain efficiency of hospitals. It is found that for most services the make-or-buy decision is not related to efficiency. Kitchen services are an important exception to this. Large hospitals tend to outsource less, which is supported by efficiency reasons. For most hospital services, outsourcing does not significantly affect the efficiency of hospitals. The focus on the make-or-buy decision may therefore be less important than often assumed. Keywords: Hospital; efficiency; Transaction; costs; Stochastic; frontier; The; Netherlands; Outsourcing (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:socmed:v:69:y:2009:i:1:p:61-67 Ordering information: This journal article can be ordered from Access Statistics for this article Social Science & Medicine is currently edited by Ichiro (I.) Kawachi and S.V. (S.V.) Subramanian More articles in Social Science & Medicine from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.