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Measuring the Relative Performance of Providers of a Health Service

Daniel Ackerberg (), Matilde Machado () and Michael Riordan

No 8385, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: A methodology is developed and applied to compare the performance of publicly funded agencies providing treatment for alcohol abuse in Maine. The methodology estimates a Wiener process that determines the duration of completed treatments, while allowing for agency differences in the effectiveness of treatment, standards for completion of treatment, patient attrition, and the characteristics of patient populations. Notably, the Wiener process model separately identifies agency fixed effects that describe differences in the effectiveness of treatment ('treatment effects'), and effects that describe differences in the unobservable characteristics of patients ('population effects'). The estimated model enables hypothetical comparisons of how different agencies would treat the same populations. The policy experiment of transferring the treatment practices of more cost-effective agencies suggests that Maine could have significantly reduced treatment costs without compromising health outcomes by identifying and transferring best practices.

JEL-codes: L22 I11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hea
Date: 2001-07
Note: HC
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