Measuring Hospital Performance in the Presence of Quasi-Fixed Inputs: An Analysis of Québec Hospitals

Daniel Bilodeau, Pierre-Yves Crémieux (), Brigitte Jaumard, Pierre Ouellette and Tsévi Vovor

Journal of Productivity Analysis, 2004, vol. 21, issue 2, 183-199

Abstract: This research proposes an approach to measure hospital performance based on a generalization of Banker and Morey (1986) and Førsund (1996). This approach considers quasi-fixed inputs explicitly, calculates their implicit cost, and quantifies returns to scale. The performance measure is decomposed into allocative and technical inefficiencies. Based on a very complete data set of Québec hospitals, we find that significant inefficiencies of up to 17% ($700 CAN million) could have been saved through improved performance. Postestimation analyses that include qualitative measures of care suggest that differences in performance are attributable to differences in management or unobservable quality of care rather than patient case mix. Copyright Kluwer Academic Publishers 2004

Keywords: hospital performance; returns to scale; implicit price; quasi-fixed inputs; allocative inefficiencies; technical inefficiencies (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (14)

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Persistent link: https://EconPapers.repec.org/RePEc:kap:jproda:v:21:y:2004:i:2:p:183-199

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DOI: 10.1023/B:PROD.0000016872.33530.e8

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