Are Critical Access Hospitals Less Efficient than Non-Converting, Prospectively Paid Rural Hospitals?

I. Cristian Nedelea and James Matthew Fannin

No 124670, 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington from Agricultural and Applied Economics Association

Abstract: This study examined differences in technical efficiency between two groups of rural hospitals operating under different Medicare reimbursement systems: cost-based reimbursed Critical Access Hospitals (CAHs) and non-converting, prospectively paid (PPS) rural hospitals. To control for hospital size, two different groups of PPS rural hospitals were specified based on bed size. We use a two-stage approach, where data envelopment analysis (DEA) is used in the first stage to estimate technical efficiency. In the second stage, we estimate the effects of environmental variables (CAH status, ownership, Medicare and Medicaid) on hospital efficiency using a truncated regression with bootstrap. Density analysis of efficiency scores suggests that CAHs are more technically efficient than both groups of non-converting, PPS rural hospitals. Similarly, the results of bootstrapped truncated regression showed a positive and significant marginal effect of CAH status suggesting that CAHs are more technically efficient than non-converting, PPS rural hospitals.

Keywords: Community/Rural/Urban Development; Health Economics and Policy (search for similar items in EconPapers)
Pages: 19
Date: 2012
New Economics Papers: this item is included in nep-eff
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea12:124670

DOI: 10.22004/ag.econ.124670

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