The decomposition of cost efficiency: An empirical application of the shadow cost function model to Dutch general hospitals

Health Care Management Science

Volumn 7, Issue 2, 2004, Pages 79-88

  Blank, Jos L T ^a,c   Eggink, Evelien ^b  

^a NEI The Netherlands   (Netherlands)

^b Social and Cultural Planning Office   (Netherlands)

^c NONE   (Netherlands)

Author keywords

Allocative efficiency; Cost efficiency; Panel data; Shadow cost model; Stochastic frontier analysis; Technical change; Technical efficiency

Indexed keywords

COST EFFECTIVENESS ANALYSIS; ECONOMIC ASPECT; GENERAL HOSPITAL; HOSPITAL; INDUSTRY; MATHEMATICAL COMPUTING; MATHEMATICAL MODEL; PERFORMANCE; RELIABILITY; REVIEW; ARTICLE; COST BENEFIT ANALYSIS; ECONOMICS; NETHERLANDS; ORGANIZATION AND MANAGEMENT; STATISTICAL MODEL;

COST-BENEFIT ANALYSIS; HOSPITALS, GENERAL; MODELS, ECONOMIC; NETHERLANDS;

EID: 2642553234     PISSN: 13869620     EISSN: None     Source Type: Journal    
DOI: 10.1023/B:HCMS.0000020647.60327.b4     Document Type: Review

References (39)

1. A. Athanassopoulos and C. Gounaris, Assessing the technical and allocative efficiency of hospital operations in Greece and its resource allocation implications, European Journal of Operational Research 133(2) (2001) 416-131.
2. A.D. Athanassopoulos, C. Gounaris and A. Sissouras, A descriptive assessment of the production and cost efficiency of general hospitals in Greece, Health Care Management Science 2(2) (1999) 97-106.
3. S.E. Atkinson and C. Cornwell, Estimation of output and input technical efficiency using a flexible functional form and panel data, International Economic Review 35(1) (1994) 245-255.
4. S.E. Atkinson and C. Cornwell, Parametric estimation of technical and allocative inefficiency with panel data, International Economic Review 35(1) (1994) 231-243.
5. R. Ball, E. Roberts and R. Thomas, Lessons learned for DEA practice from health care applications in the UK, in: Data Envelopment Analysis in the Service Sector, ed. G. Westerman (Wiesbaden, Gabler, 1999).
6. R.D. Banker, R.F. Conrad and R.P. Strauss, A comparative application of data envelopment analysis and translog methods: An illustrative study of hospital production, Management Science 32(1) (1986) 30-44.
7. J.L.T. Blank, E. Eggink and A.H.Q.M. Merkies, Between bed and budget: The efficiency of dutch hospitals, in: Public Provision and Performance, ed. J.L. Blank (SCP/Elsevier, The Hague, 2000).
8. J.F. Burgess and P.W. Wilson, Variation in inefficiency among US hospitals, INFOR 36(3) (1998) 84-102.
9. J.R.G. Butler, Hospital Cost Analysis (Kluwer Academic, Dordrecht, 1995).
10. A. Charnes, W.W. Cooper and E. Rhodes, Measuring the efficiency of decision making units, European Journal of Operational Research 2(6) (1978) 429-444.
11. C. Cornwell, P. Schmidt and R. Sickles, Production frontiers with cross-sectional and time series variation in efficiency levels, Journal of Econometrics 46 (1990) 185-200.
12. A. Dor, S. Duffy and H. Wong, Expense preference behavior and contract-management: Evidence from U.S. hospitals, Southern Economic Journal 64(2) (1997) 542-554.
13. B.K. Eakin, Do physicians minimize cost? in: The Measurement of Productive Efficiency: Techniques and Applications, eds. H.O. Fried, C.A.K. Lovell and S.S. Schmidt (Oxford University Press, Oxford, 1993) pp. 221-236.
14. B.K. Eakin and T.J. Kniesner, Estimating a non-minimum cost function for hospitals, Southern Economic Journal 54(3) (1988) 583-592.
15. T.S. Gruca and D. Nath, The technical efficiency of hospitals under a single payer system: The case of Ontario Community Hospitals, Health Care Management Science 4 (2001) 91-101.
16. S. Grosskopf and V. Valdmanis, Measuring hospital performance: A non-parametric approach, Journal of Health Economics 6 (1987) 89-197.
17. S. Grosskopf and V. Valdmanis, Comparing teaching and non-teaching hospitals: A frontier approach, Health Care Management Science 4 (2001) 83-90.
18. M.M. Hofmarcher, I. Patterson and M. Riedel, Measuring hospital efficiency in Austria: A DEA approach, Health Care Management Science 5 (2002) 7-14.
19. B. Hollingsworth, P.J. Dawson, and N. Maniadakis, Efficiency measurement of health care: A review of non-parametric methods and applications, Health Care Management Science 2(3) (1999) 161-172.
20. R. Jacobs, Alternative methods to examine hospital efficency: Data envelopment analysis and stochastic frontier analysis, Health Care Management Science 4 (2001) 103-115.
21. G.G. Judge, R.C. Hill, W.E. Griffiths, H. Lütkepohl and T.-C. Lee, Introduction to the Theory and Practice of Econometrics (Wiley, New York, 1988).
22. A. Koutsoyiannis, Modern Microeconomics (MacMillan Press, London, 1987).
23. S.B. Kumbhakar, Modeling allocative inefficiency in a translog cost function and cost share equations: An exact relationship, Journal of Econometrics 76 (1997) 351-356.
24. S.C. Kumbhakar and C.A.K. Lovell, Stochastic Frontier Analysis (Cambridge University Press, New York, 2000).
25. S.C. Kumbhakar and A. Bhattacharyya, Price distortions and resource-use efficiency in Indian agriculture: A restricted profit function approach, The Review of Economics and Statistics (1992) 231-239.
26. T. Li and R. Rosenman, Cost inefficiency in Washington hospitals: A stochastic frontier approach using panel data, Health Care Management Science 4 (2001) 73-81.
27. O.W. Maietta, The decomposition of cost efficiency through the shadow cost model: The effect of the input price normalisation, Paper submitted to ESEM (1999).
28. O.W. Maietta, The decomposition of cost efficiency into the technical and allocative components with panel data of Italian dairy farms, European Review of Agricultural Economics 27(4) (2000) 473-495.
29. R.C. Morey, D.J. Fine and S.W. Loree, Comparing allocative efficiencies of hospitals. Omega, International Journal of Management Science 18(1) (1990) 71-83.
30. D. Parkin and B. Hollingsworth, Measuring production efficiency of acute hospitals in Scotland, 1991-1994: Validity issues in data envelopment analysis, Applied Economics 29 (1997) 1425-1433.
31. D. Prior and M. Sola, Technical efficiency and economies of diversification, Health Care Management Science 3 (2000) 299-307.
32. S. Reinhard, Econometric Analysis of Economic and Environmental Efficiency of Dutch Dairy Farms (Wageningen Agricultural University, Wageningen, 1999).
33. M.D. Rosko, Impact of internal and external environmental pressures on hospital inefficiency, Health Care Management Science 2 (1999) 63-74.
34. J. Ruggiero, Efficiency estimation and error decomposition in the stochastic frontier model: A Monte Carlo analysis, European Journal of Operational Research 115(3) (1999) 555-563.
35. R.W. Shepard, Cost and Production Functions (Princeton University Press, Princeton, NJ, 1953).
36. R.H. Spady and A.F. Friedlaender, Hedonic cost functions for the regulated trucking industry, The Bell Journal of Economics 9(1) (1978) 159-179.
37. D.F. Vitaliano and M. Toren, Hospital cost and efficiency in a regime of stringent regulation, Eastern Economic Journal 22(2) (1996) 161-175.
38. A. Zellner, An efficient method of estimating seemingly unrelated regression and tests of aggregation bias, Journal of the American Statistical Association 57 (1962) 500-509.
39. S. Zuckerman, J. Hadley and L. lezzoni, Measuring hospital efficiency with frontier cost functions, Journal of Health Economics 13(3) (1994) 255-280.