Effects of ownership, subsidization and teaching activities on hospital costs in Switzerland

Can competition improve hospital quality of care? A difference-in-differences approach to evaluate the effect of increasing quality transparency on hospital quality

Public reporting on the quality of care is intended to guide patients to the provider with the highest quality and to stimulate a fair competition on quality. We apply a difference-in-differences design to test whether hospital quality has improved more in markets that are more competitive after the first public release of performance data in Germany in 2008. Panel data from 947 hospitals from 2006 to 2010 are used. Due to the high complexity of the treatment of stroke patients, we approximate general hospital quality by the 30-day risk-adjusted mortality rate for stroke treatment. Market structure is measured (comparatively) by the Herfindahl-Hirschman index (HHI) and by the number of hospitals in the relevant market. Predicted market shares based on exogenous variables only are used to compute the HHI to allow a causal interpretation of the reform effect. A homogenous positive effect of competition on quality of care is found. This effect is mainly driven by the response of non-profit hospitals that have a narrow range of services and private for-profit hospitals with a medium range of services. The results highlight the relevance of outcome transparency to enhance hospital quality competition.

Evaluating the comparative efficiency of medical centers in Taiwan: a dynamic data envelopment analysis application

Background

People in Taiwan enjoy comprehensive National Health Insurance coverage. However, under the global budget constraint, hospitals encounter enormous challenges. This study was designed to examine Taiwan medical centers' efficiency and factors that influence it.

Methods

We obtained data from open sources of government routine publications and hospitals disclosed by law to the National Health Insurance Administration, Ministry of Health and Welfare, Taiwan. The dynamic data envelopment analysis (DDEA) model was adopted to estimate all medical centers' efficiencies during 2015–2018. Beta regression models were used to model the efficiency level obtained from the DDEA model. We applied an input-oriented approach under both the constant returns-to-scale (CRS) and variable returns-to-scale (VRS) assumptions to estimate efficiency.

Results

The findings indicated that 68.4% (13 of 19) of medical centers were inefficient according to scale efficiency. The mean efficiency scores of all medical centers during 2015–2018 under the CRS, VRS, and Scale were 0.85, 0.930, and 0.95,respectively. Regression results showed that an increase in the population less than 14 years of age, assets, nurse-patient ratio and bed occupancy rate could increase medical centers' efficiency. The rate of emergency return within 3-day and patient self-pay revenues were associated significantly with reduced hospital efficiency (p < 0.05). The result also showed that the foundation owns medical center has the highest efficiency than other ownership hospitals.

Conclusions

The study results provide information for hospital managers to consider ways they could adjust available resources to achieve high efficiency.

Supplementary Information

The online version contains supplementary material available at 10.1186/s12913-022-07869-8.

Key Indicators Affecting Hospital Efficiency: A Systematic Review

Background

Measuring hospital efficiency is a systematic process to optimizing performance and resource allocation. The current review study has investigated the key input, process, and output indicators that are commonly used in measuring the technical efficiency of the hospital to promote the accuracy of the results.

Methods

To conduct this systematic review, the electronic resources and databases MEDLINE (via PubMed), Scopus, Ovid, Proquest, Google Scholar, and reference lists of the selected articles were used for searching articles between 2010 and 2019. After in-depth reviews based on the inclusion and exclusion criteria, among 1,537 studies, 144 articles were selected for the final assessment. Critical Appraisal Skills Programme (CASP) Checklist was used for evaluating the quality of the articles. The main findings of studies have been extracted using content analysis.

Results

After the final analysis, the Context/Input indicators that were commonly considered by studies in analyzing hospital technical efficiency include different variables related to Hospital Capacity, Structure, Characteristics, Market concentration, and Costs. The Process/Throughput indicators include different variables related to Hospital Activity or services-oriented process Indicators, Hospital Quality-oriented process indicators, and Hospital Educational processes. Finally, the Output/Outcome indicators include different variables related to Hospital Activity-related output variables and Quality-related output/outcomes variables.

Conclusion

This study has identified that it is necessary to mix and assess a set of input, process, and output indicators of the hospital with both quantitative and qualitative indicators for measuring the technical efficiency of hospitals comprehensively.

Costs of polish county hospitals-A behavioral panel function

In the paper the costs of Polish county hospitals in 2015-2018 are studied using behavioral cost function. The set of variables combines hospitals' characteristics which may determine their level of costs, such as the form of ownership, bed turnover rate, number of patient-days and share of beds in emergency department with environment characteristics which may influence both outsourcing costs and patients' health. In 2017 the system of basic hospital service provision (hospital network) was introduced in Poland. Dummy variables included in the model represent the category of hospital in the system. The results show that the costs may be described using fixed effect panel model. Positive impact of percentage of emergency department patients transferred to other departments and of wages is found. Higher ratio of residents and interns to doctors is found to decrease costs. Dummy variable for the period after the introduction of hospital network assumed a negative sign with costs, but the parameter remained insignificant.

Improving health care from the bottom up: Factors for the successful implementation of kaizen in acute care hospitals

BACKGROUND

Kaizen-a management technique increasingly employed in health care-enables employees, regardless of their hierarchy level, to contribute to the improvement of their organization. The approach puts special emphasis on frontline employees because it represents one of their main opportunities to participate directly in decision making. In this study, we aimed to (1) understand the experiences of nurses in two hospitals that had recently implemented kaizen, and (2) identify factors affecting the implementation of the technique.

METHODS

By means of purposeful sampling, we selected 30 nurses from different units in two private acute care hospitals in Switzerland in May 2018. We used the Organizational Transformation Model to conduct semi-structured interviews and perform qualitative content analysis. Lastly, originating from Herzberg's motivation theory, we suggest two types of factor influencing the implementation of kaizen-hygiene factors that may prevent nurses from getting demotivated, and motivational factors that may boost their motivation.

RESULTS

Nurses generally experienced kaizen as a positive practice that enabled them to discuss work-related activities in a more comprehensive manner. In some cases, however, a lack of visible improvement in the workplace lowered nurses' motivation to make suggestions. Nurses' attitudes towards kaizen differed across both hospitals depending on the available managerial support, resources such as infrastructure and staffing levels.

CONCLUSIONS

From our findings, we derived several coping strategies to help health practitioners implement kaizen for the benefit of their organization and employees: Strong managerial support, appropriate use of kaizen tools, and a greater sense of team cohesion, among other factors, can influence how effectively hospital teams implement kaizen. To reap the benefits of kaizen, hospital managers should promote the exchange of opinions across hierarchy levels, allocate the necessary resources in terms of personnel and infrastructure, and show nurses how the technique can help them improve their workplace.

Efficiency and Productivity Change of Public Hospitals in Panama: Do Management Schemes Matter?

In Latin American and Caribbean countries, the main concern of public health care managers has been traditionally placed on problems related to funding, payment mechanisms, and equity of access. However, more recently, there is a growing interest in improving the levels of efficiency and reducing costs in the provision of health services. In this paper we focus on measuring the technical efficiency and productivity change of public hospitals in Panama using bootstrapped Malmquist indices, which allows us to assess the statistical significance of changes in productivity, efficiency, and technology. Specifically, we are interested in comparing the performance of hospitals belonging to the two different management schemes coexisting in the country, the Social Security Fund (SSF) and the Ministry of Health (MoH). Our dataset includes data about 22 public hospitals (11 for each model) during the period between 2005 and 2015. The results showed that the productivity growth of hospitals belonging to the SSF has been much higher than that of the hospitals belonging to the Ministry of Health over the evaluated period (almost 4% compared to 1.5%, respectively). The main explanation for these divergences is the superior growth of technological change in the former hospitals, especially in the final years of the evaluated period.

Multifaced Evidence of Hospital Performance in Pennsylvania

As health care costs and demands for health care services have been rising for decades in the United States, health care reforms have focused on increasing the performance of health care delivery. Competition has been considered as a mechanism to improve the quality of health care services and operational performance. Evidence on health care performance and market competition, however, has not sufficiently been reported to track its progress. The purpose of this study is twofold: First, we measure hospital performance over nine years, using the Malmquist Productivity Index. Second, we examine the impact of market competition on hospital efficiency in Pennsylvania, using a two-stage estimation procedure. The bootstrapped Malmquist productivity indices resulted in noticeable performance improvements. However, no steady performance trends were found during the course of nine years. In examining the impact of market competition, the bootstrapped panel Tobit analysis was applied after computing the efficiency scores with Data Envelopment Analysis. The results of the Tobit model found that hospitals run more efficiently in less competitive regions than in more competitive regions. The finding implies that hospitals underperforming in productivity growth should benchmark best practices of efficient hospitals to improve their productivity level. Another implication is that market competition would not be the best approach to effect the improvement of hospital efficiency in delivering health care services.

How Project Management and Top Management Involvement Affect the Innovativeness of Professional Service Organizations—An Empirical Study on Hospitals

This study investigates how top management involvement and project management professionalization affect firm innovativeness. We focus on hospitals as representative of professional service organizations characterized by pluralistic individual and organizational interests. A multiyear analysis of project management survey and objective performance data of 90 hospitals indicates that top management involvement in innovation projects reduces hospital innovativeness, and project management professionalization increases hospital innovativeness. However, increasing project management professionalization simultaneously strengthens top management involvement’s effectiveness. The results contribute to our understanding of potential interactions and different effects of project management efforts at different organizational levels in professional service organizations.

Geographic variation in the delivery of high-value inpatient care

OBJECTIVES

To measure value in the delivery of inpatient care and to quantify its variation across U.S. regions.

DATA SOURCES / STUDY SETTING

A random (20%) sample of 33,713 elderly fee-for-service Medicare beneficiaries treated in 2,232 hospitals for a heart attack in 2013.

STUDY DESIGN

We estimate a production function for inpatient care, defining output as stays with favorable patient outcomes in terms of survival and readmission. The regression model includes hospital inputs measured by treatment costs, as well as patient characteristics. Region-level effects in the production function are used to estimate the productivity and value of the care delivered by hospitals within regions.

DATA COLLECTION / EXTRACTION METHODS

Medicare claims and enrollment files, linked to the Dartmouth Atlas of Health Care and Inpatient Prospective Payment System Impact Files.

PRINCIPAL FINDINGS

Hospitals in the hospital referral region at the 90th percentile of the value distribution delivered 54% more high-quality stays than hospitals at the 10th percentile could have delivered, after adjusting for treatment costs and patient severity.

CONCLUSIONS

Variation in the delivery of high-value inpatient care points to opportunities for better quality and lower costs.

Productivity growth and quality changes of hospitals in Taiwan: does ownership matter?

As the competition in the Taiwanese medical industry becomes increasingly fierce, public hospitals are confronted with challenges in orientation and operations. This study measured changes in the operational efficiency of public and their competitors, non-public hospitals, in Taiwan. This study considered differences in technology and scale between public and non-public hospitals and adopted the quality-incorporating metafrontier Malmquist productivity index to analyze inputs, outputs, and quality achievements of hospitals. The data consisted of 40 public hospitals and 79 non-public hospitals in Taiwan during the period 2008-2014. This study measured productivity growth and quality changes. Moreover, it further identified technological gaps and quality gaps in different types of hospitals with respect to the metafrontier. At the same time, comparisons of changes in quality between public and non-public hospitals were also examined. The empirical results showed that public hospitals were better than non-public ones in terms of productivity. Meanwhile, it was also found that most of the decomposition in productivity was higher in public hospitals than in non-public ones, especially in terms of improvements in technology and quality. This paper presented public hospitals outperformed non-public ones during the research period in spite of the fact that private hospitals had become larger and group-oriented. Therefore, public hospitals and regulators made appropriate adjustments and responses in the face of the pressure of competition in the market.

Quality and resource efficiency in hospital service provision: A geoadditive stochastic frontier analysis of stroke quality of care in Germany

We specify a Bayesian, geoadditive Stochastic Frontier Analysis (SFA) model to assess hospital performance along the dimensions of resources and quality of stroke care in German hospitals. With 1,100 annual observations and data from 2006 to 2013 and risk-adjusted patient volume as output, we introduce a production function that captures quality, resource inputs, hospital inefficiency determinants and spatial patterns of inefficiencies. With high relevance for hospital management and health system regulators, we identify performance improvement mechanisms by considering marginal effects for the average hospital. Specialization and certification can substantially reduce mortality. Regional and hospital-level concentration can improve quality and resource efficiency. Finally, our results demonstrate a trade-off between quality improvement and resource reduction and substantial regional variation in efficiency.

Choice of reserve capacity by hospitals: a problem for prospective payment

This contribution analyzes the impact of prospective payment on hospital decisions with regard to reserve capacity, using Swiss hospital data covering the years 2004-2009. This data set is unique because it permits distinguishing of institutional characteristics (e.g., ownership status) from the mode of payment as determinants of hospital efficiency, due to the fact that some Swiss cantons introduced prospective payment early while others waited for federal legislation to be enacted in 2012. Since a hospital's choice of reserve capacity depends also on the risk preferences of management while affecting the cost function, heterogeneity is predicted even in the presence of identical technology and factor prices. For estimating hospitals' marginal costs, we employ the flexible representation of risk preferences by Pope and Chavas [Am J Agric Econ 76, 196-204 (1994)]. Production uncertainty is measured as the difference between actual admissions and admissions predicted by an autoregressive moving average model. Its effect on hospital cost is analyzed using a multilevel stochastic cost frontier model with random coefficients reflecting unobserved differences in technology. Public hospitals are found to opt for a higher probability of meeting unexpected demand, as predicted. Their operating cost is 1.1% higher than for private hospitals and even 1.9% higher than for teaching hospitals, creating an incentive to turn away patients or to keep them waiting for treatment.

Comparing public and private providers: a scoping review of hospital services in Europe

BACKGROUND

What is common to many healthcare systems is a discussion about the optimal balance between public and private provision. This paper provides a scoping review of research comparing the performance of public and private hospitals in Europe. The purpose is to summarize and compare research findings and to generate questions for further studies.

METHODS

The review was based on a methodological approach inspired by the British EPPI-Centre's methodology. This review was broader than review methodologies used by Cochrane and Campbell and included a wider range of methodological designs. The literature search was performed using PubMed, EconLit and Web of Science databases. The search was limited to papers published from 2006 to 2016. The initial searches resulted in 480 studies. The final sample was 24 papers. Of those, 17 discussed economic effects, and seven studies addressed quality.

RESULTS

Our review of the 17 studies representing more than 5500 hospitals across Europe showed that public hospitals are most frequently reported as having the best economic performance compared to private not-for-profit (PNFP) and private for-profit (PFP) hospitals. PNFP hospitals are second, while PFP hospitals are least frequently reported as superior. However, a sizeable number of studies did not find significant differences. In terms of quality, the results are mixed, and it is not possible to draw clear conclusions about the superiority of an ownership type. A few studies analyzed patient selection. They indicated that public hospitals tend to treat patients who are slightly older and have lower socioeconomic status, riskier lifestyles and higher levels of co-morbidity and complications than patients treated in private hospitals.

CONCLUSIONS

The paper points to shortcomings in the available studies and argues that future studies are needed to investigate the relationship between contextual circumstances and performance. A big weakness in many studies addressing economic effects is the failure to control for quality and other operational dimensions, which may have influenced the results. This weakness should also be addressed in future comparative studies.

Association Between Medicare's Mandatory Hospital Value-Based Purchasing Program and Cost Inefficiency

BACKGROUND

The Patient Protection and Affordable Care Act instituted pay-for-performance programs, including Hospital Value-Based Purchasing (HVBP), designed to encourage hospital quality and efficiency.

OBJECTIVE AND METHOD

While these programs have been evaluated with respect to their implications for care quality and financial viability, this is the first study to assess the relationship between hospitals' cost inefficiency and their participation in the programs. We estimate a translog specification of a stochastic cost frontier with controls for participation in the HVBP program and clinical and outcome quality for California hospitals for 2012-2015.

RESULTS

The program-participation indicators' parameters imply that participants were more cost inefficient than their peers. Further, the estimated coefficients for summary process of care quality indexes for three health conditions (acute myocardial infarction, pneumonia, and heart failure) suggest that higher quality scores are associated with increased operating costs.

CONCLUSION

The estimated coefficients for the outcome quality variables suggest that future determination of HVBP payment adjustments, which will depend solely on mortality rates as measures of clinical care quality, may not only be aligned with increasing healthcare quality but also reducing healthcare costs.

How should hospital reimbursement be refined to support concentration of complex care services?

The English National Health Service is promoting concentration of the treatment of patients with relatively rare and complex conditions into a limited number of specialist centres. If these patients are more costly to treat, the prospective payment system based on Healthcare Resource Groups (HRGs) may need refinement because these centres will be financially disadvantaged. To assess the funding implications of this concentration policy, we estimate the cost differentials associated with caring for patients that receive complex care and examine the extent to which complex care services are concentrated across hospitals and HRGs. We estimate random effects models using patient-level activity and cost data for all patients admitted to English hospitals during the 2013/14 financial year and construct measures of the concentration of complex services. Payments for complex care services need to be adjusted if they have large cost differentials and if provision is concentrated within a few hospitals. Payments can be adjusted either by refining HRGs or making top-up payments to HRG prices. HRG refinement is preferred to top-payments the greater the concentration of services among HRGs.

Determinants of transient and persistent hospital efficiency: The case of Italy

In this paper, we extend the 4-random-component closed skew-normal stochastic frontier model by including exogenous determinants of hospital persistent (long-run) and transient (short-run) inefficiency, separated from unobserved heterogeneity. We apply this new model to a dataset composed by 133 Italian hospitals during the period 2008-2013. We show that average total inefficiency is about 23%, higher than previous estimates; hence, a model where the different types of inefficiency and hospital unobserved characteristics are not confounded allows us to get less biased estimates of hospital inefficiency. Moreover, we find that transient efficiency is more important than persistent efficiency, as it accounts for 60% of the total one. Last, we find that ownership (for-profit hospitals are more transiently inefficient and less persistently inefficient than not-for-profit ones, whereas public hospitals are less transiently inefficient than not-for-profit ones), specialization (specialized hospitals are more transiently inefficient than general ones; i.e., there is evidence of scope economies in short-run efficiency), and size (large-sized hospitals are better than medium and small ones in terms of transient inefficiency) are determinants of both types of inefficiency, although we do not find any statistically significant effect of multihospital systems and teaching hospitals.

Estimation of a physician practice cost function

OBJECTIVE

The goal of the present paper is to provide evidence on the behavior of physician practice cost functions.

DATA SOURCES

Our study is based on the data of 3686 physician practices in Germany for the years 2006 to 2008.

STUDY DESIGN

We apply a translog functional form and include a comprehensive set of variables that have not been previously used in this context. A system of four equations using three-stage least squares is estimated.

PRINCIPAL FINDINGS

We find that a higher degree of specialization leads to a decrease in costs, whereas quality certification increases costs. Costs of group practices are higher than of solo practices. The latter finding can be explained by the existence of indivisibilities of expensive technical equipment. Smaller practices do not reach the critical mass to invest in certain technologies, which leads to differences in the type of health care services provided by different practice types.

CONCLUSIONS

This is the first study to use physician practices as the unit of observation and to consider the endogenous character of physician input. Our results suggest that identifying factors that influence physician practice costs is important for providing evidence-based physician payment systems and to enable decision-makers to set incentives effectively.

Efficiency and optimal size of hospitals: Results of a systematic search

Background

National Health Systems managers have been subject in recent years to considerable pressure to increase concentration and allow mergers. This pressure has been justified by a belief that larger hospitals lead to lower average costs and better clinical outcomes through the exploitation of economies of scale. In this context, the opportunity to measure scale efficiency is crucial to address the question of optimal productive size and to manage a fair allocation of resources.

Methods and findings

This paper analyses the stance of existing research on scale efficiency and optimal size of the hospital sector. We performed a systematic search of 45 past years (1969–2014) of research published in peer-reviewed scientific journals recorded by the Social Sciences Citation Index concerning this topic. We classified articles by the journal’s category, research topic, hospital setting, method and primary data analysis technique. Results showed that most of the studies were focussed on the analysis of technical and scale efficiency or on input / output ratio using Data Envelopment Analysis. We also find increasing interest concerning the effect of possible changes in hospital size on quality of care.

Conclusions

Studies analysed in this review showed that economies of scale are present for merging hospitals. Results supported the current policy of expanding larger hospitals and restructuring/closing smaller hospitals. In terms of beds, studies reported consistent evidence of economies of scale for hospitals with 200–300 beds. Diseconomies of scale can be expected to occur below 200 beds and above 600 beds.

Balancing the health workforce: breaking down overall technical change into factor technical change for labour-an empirical application to the Dutch hospital industry

BACKGROUND

Well-trained, well-distributed and productive health workers are crucial for access to high-quality, cost-effective healthcare. Because neither a shortage nor a surplus of health workers is wanted, policymakers use workforce planning models to get information on future labour markets and adjust policies accordingly. A neglected topic of workforce planning models is productivity growth, which has an effect on future demand for labour. However, calculating productivity growth for specific types of input is not as straightforward as it seems. This study shows how to calculate factor technical change (FTC) for specific types of input.

METHODS

The paper first theoretically derives FTCs from technical change in a consistent manner. FTC differs from a ratio of output and input, in that it deals with the multi-input, multi-output character of the production process in the health sector. Furthermore, it takes into account substitution effects between different inputs. An application of the calculation of FTCs is given for the Dutch hospital industry for the period 2003-2011. A translog cost function is estimated and used to calculate technical change and FTC for individual inputs, especially specific labour inputs.

RESULTS

The results show that technical change increased by 2.8% per year in Dutch hospitals during 2003-2011. FTC differs amongst the various inputs. The FTC of nursing personnel increased by 3.2% per year, implying that fewer nurses were needed to let demand meet supply on the labour market. Sensitivity analyses show consistent results for the FTC of nurses.

CONCLUSIONS

Productivity growth, especially of individual outputs, is a neglected topic in workforce planning models. FTC is a productivity measure that is consistent with technical change and accounts for substitution effects. An application to the Dutch hospital industry shows that the FTC of nursing personnel outpaced technical change during 2003-2011. The optimal input mix changed, resulting in fewer nurses being needed to let demand meet supply on the labour market. Policymakers should consider using more detailed and specific data on the nature of technical change when forecasting the future demand for health workers.

[Determination of training costs associated with surgical procedures during specialization as an orthopaedic and trauma surgeon]

BACKGROUND

Trauma surgery is a discipline in which the training phase for specialization requires a technical and time-intensive learning curve, including the repetitive training of manual skills. This results in prolonged operation times and thus elevated costs.

OBJECTIVES

The present study retrospectively examines operations in trauma surgery and orthopaedics at a Munich university hospital according to the required curriculum for further specialist training. The duration of procedures at the various training levels and the resulting costs were compared.

MATERIAL AND METHODS

Based on digital surgical records, more than 2,000 surgical interventions were analysed and checked that they fulfilled the practical requirements. Patients with multiple injuries and polytrauma, in addition to irregularly complex cases, were removed from the calculation to ensure high comparability of the individual cases. This yielded more than 1,000+ cases for evaluation. The per-minute cost was calculated to allow for the translation of operating time into costs.

RESULTS

The study shows a prolonged duration of operating time of 19.75 % when the procedure was conducted by residents. This prolongation can be split into 37 subgroups according to body region and type of procedure. The prolongation of operation time could be quantified as a specific prolongation per cluster, in addition to cumulative prolongation. By including the operating costs, the operation-dependent training costs are shown as an exact sum of Euros.

CONCLUSION

Surgical training of residents costs hospitals the appropriate amounts of time and money and reduces the overall number of procedures performed, justifying special consideration of the financing of training hospitals.

Mortality, length of stay, and inpatient charges for heart failure patients at public versus private hospitals in South Korea

PURPOSE

This study compared in-hospital mortality within 30 days of admission, lengths of stay, and inpatient charges among patients with heart failure admitted to public and private hospitals in South Korea.

MATERIALS AND METHODS

We obtained health insurance claims data for all heart failure inpatients nationwide between November 1, 2011 and May 31, 2012. These data were then matched with hospital-level data, and multi-level regression models were examined. A total of 8406 patients from 253 hospitals, including 31 public hospitals, were analyzed.

RESULTS

The in-hospital mortality rate within 30 days of admission was 0.92% greater and the mean length of stay was 1.94 days longer at public hospitals than at private hospitals (mortality: 5.18% and 4.26%, respectively; LOS: 12.08 and 10.14 days, respectively). The inpatient charges were 11.4% lower per case and 24.5% lower per day at public hospitals than at private hospitals. After adjusting for patient- and hospital-level confounders, public hospitals had a 1.62-fold higher in-hospital mortality rate, a 16.5% longer length of stay, and an 11.7% higher inpatient charge per case than private hospitals, although the charges of private hospitals were greater in univariate analysis.

CONCLUSION

We recommend that government agencies and policy makers continue to monitor quality of care, lengths of stay in the hospital, and expenditures according to type of hospital ownership to improve healthcare outcomes and reduce spending.

A comparison of outpatient healthcare expenditures between public and private medical institutions in urban China: an instrumental variable approach

The growth of healthcare expenditure provokes constant comments and discussions, as countries battle the issues on cost containment and cost effectiveness. Prior to 1978, medical institutions in China were either state-owned or were collective public hospitals. Since 1978, China has been trying to rebuild its healthcare system, which was destroyed during the 'cultural revolution', allowing private medical institutions to deliver healthcare services. As a result, private medical institutions have grown from 0% to 28.57% between 1978 and 2010. In this context, we compare outpatient healthcare expenditures between public and private medical institutions. The central problem of this comparison is that the choice of medical institution is endogenous. So we apply an instrumental variable (IV) framework utilizing geographic information (whether the closest medical institution is private) as the instrument while controlling for severity of health and other relevant confounding factors. Using China's Urban Resident Basic Medical Insurance Survey 2008-2010, we found that there is no difference in expenditure between public and private medical institutions when IV framework is used. Our econometric tests suggest that our IV model is specified appropriately. However, the ordinary least square model, which is inconsistent in the presence of endogenous regressor(s), reveals that public medical institutions are more expensive.

Payment schemes and cost efficiency: evidence from Swiss public hospitals

This paper aims at analysing the impact of prospective payment schemes on cost efficiency of acute care hospitals in Switzerland. We study a panel of 121 public hospitals subject to one of four payment schemes. While several hospitals are still reimbursed on a per diem basis for the treatment of patients, most face flat per-case rates-or mixed schemes, which combine both elements of reimbursement. Thus, unlike previous studies, we are able to simultaneously analyse and isolate the cost-efficiency effects of different payment schemes. By means of stochastic frontier analysis, we first estimate a hospital cost frontier. Using the two-stage approach proposed by Battese and Coelli (Empir Econ 20:325-332, 1995), we then analyse the impact of these payment schemes on the cost efficiency of hospitals. Controlling for hospital characteristics, local market conditions in the 26 Swiss states (cantons), and a time trend, we show that, compared to per diem, hospitals which are reimbursed by flat payment schemes perform better in terms of cost efficiency. Our results suggest that mixed schemes create incentives for cost containment as well, although to a lesser extent. In addition, our findings indicate that cost-efficient hospitals are primarily located in cantons with competitive markets, as measured by the Herfindahl-Hirschman index in inpatient care. Furthermore, our econometric model shows that we obtain biased estimates from frontier analysis if we do not account for heteroscedasticity in the inefficiency term.

Employment effects of hospital privatization in Germany

The main argument for the ongoing privatization process is that privatization will lead to an increase in efficiency, which has been confirmed by a large number of studies. An important argument against privatization is that privatization may lead to employment reductions. In the hospital sector, potential employment reductions might also lead to a decrease in the quality of care. This is the first study to investigate the employment effects of different types of hospital privatization (i.e., for-profit vs non-profit privatization) on different categories of staff. A combination of propensity score matching and difference-in-difference methods was used to identify the causal effect. We found large employment reductions after for-profit privatization, while there were no permanent reductions after non-profit privatization. Moreover, even for-profit privatization does not affect all types of staff. While there are large reductions in non-clinical staff, we could not detect any reduction in the number of physicians. The consequences of the detected employment effects of privatization have to be addressed in greater detail in future research.

Assessing the relationships between hospital resources and activities: a systematic review

Face the challenge of minimizing their resource utilization without reducing the quality of healthcare. Achieving this aim requires precise analysis and optimization of various inputs and outputs. This paper presents a systematic review of the relationships between hospital resources (considered productivity inputs) and financial and activity outcomes (considered productivity outputs). Several electronic bibliographic databases and the Internet were searched for articles published between January 1990 and December 2013 that examined the relationships between hospital resources and financial and activity outcomes. We assessed the quality of the study design, the nature of the sample, input and output indicators, and the statistical methods used for each selected study. Thirty-eight original papers were selected. Data Envelopment Analysis (DEA) and Stochastic Frontier Analysis (SFA) were the most statistical methods used. Based on our analysis, we retained 18 input and 19 output indicators that could constitute the basis for hospital productivity benchmarking. Selecting a small set of shared economic and activity indicators is relevant for assessing the productivity of a hospital, measuring trends and performing national or international benchmarking. Such indicators should be combined with quality measures for a comprehensive evaluation approach.

Health-care-seeking patterns in the emerging private sector in Burkina Faso: a population-based study of urban adult residents in Ouagadougou

BACKGROUND

The private medical care sector is expanding in urban cities in Sub-Saharan Africa (SSA). However, people's health-care-seeking behaviors in this new landscape remain poorly understood; furthermore, distinguishing between public and private providers and among various types of private providers is critical in this investigation. This study assessed, by type, the healthcare providers urban residents in Burkina Faso visit, and their choice determinants.

METHOD

We conducted a population-based survey of a representative sample of 1,600 households in Ouagadougou from July to November 2011, consisting of 5,820 adults. We assessed the types of providers people typically sought for severe and non-severe conditions. We applied generalized estimating equations in this study.

RESULTS

Among those surveyed, 97.7% and 53.1% indicated that they seek a formal provider for treating severe and non-severe conditions, respectively. Among the formal provider seekers, 20.5% and 17.0% chose for-profit (FP) providers for treating severe and non-severe conditions, respectively. Insurance coverage was held by 2.0% of those surveyed. Possessing insurance was the strongest predictor for seeking FP, for both severe (odds ratio [OR]  = 1.15, 95% confidence interval [CI] = 1.04-1.28), and non-severe conditions (OR = 1.22, 95% CI = 1.07-1.39). Other predictors included being a formal jobholder and holding a higher level education. By contrast, we observed no significant difference in predisposing, enabling, or need characteristics between not-for-profit (NFP) provider seekers and public provider seekers. Proximity was the primary reason for choosing a provider.

CONCLUSION

The results suggested that FP providers play a crucial role in the urban healthcare market in SSA. Socioeconomic status and insurance status are significant predictors of provider choice. The findings can serve as a crucial reference for policymakers in response to the emergence of FP providers in SSA.

Hospital efficiency under prospective reimbursement schemes: an empirical assessment for the case of Germany

The introduction of prospective hospital reimbursement based on diagnosis-related groups (DRG) has been a conspicuous attempt to decelerate the steady increase of hospital expenditures in the German health sector. In this work, the effect of the financial reform on hospital efficiency is subjected to empirical testing by means of two complementary testing approaches. On the one hand, we apply a two-stage procedure based on non-parametric efficiency measurement. On the other hand, a stochastic frontier model is employed that allows a one-step estimation of both production frontier parameters and inefficiency effects. To identify efficiency gains as a consequence of changes in the hospital incentive structure, we account for technological progress, spatial dependence and hospital heterogeneity. The results of both approaches do not reveal any increase in overall efficiency after the DRG reform. In contrast, a significant decline in overall hospital efficiency over time is observed.

The impact of policy on hospital productivity: a time series analysis of Dutch hospitals

The health care industry, in particular the hospital industry, is under an increasing degree of pressure, by an ageing population, advancing expensive medical technology a shrinking labor. The pressure on hospitals is further increased by the planned budget cuts in public spending by many current administrations as a result of the economic and financial crises. However, productivity increases may alleviate these problems. Therefore we study whether productivity in the hospital sector is growing, and whether this productivity growth can be influenced by government policy. Using an econometric time series analysis of the hospital sector in the Netherlands, productivity is estimated for the period 1972-2010. Then, productivity is linked to the different regulation regimes during that period, ranging from output funding in the 1970s to the current liberalized hospital market. The results indicate that the average productivity of the hospital sector in different periods differs and that these differences are related to the structure of regulation in those periods.

Differences in length of stay for hip replacement between public hospitals, specialised treatment centres and private providers: selection or efficiency?

We investigate differences in patients' length of stay between National Health Service (NHS) public hospitals, specialised public treatment centres and private treatment centres that provide elective (non-emergency) hip replacement to publicly funded patients. We find that the specialised public treatment centres and private treatment centres have, on average, respectively 18% and 40% shorter length of stay compared with NHS public hospitals, even after controlling for differences in age, gender, number and type of diagnoses, deprivation and regional variation. Therefore, we interpret such differences as because of efficiency as opposed to selection of less complex patients. Quantile regression suggests that the proportional differences between different provider types are larger at the higher conditional quantiles of length of stay.

Electronic medical records and cost efficiency in hospital medical-surgical units

This study examines the impact of electronic medical records (EMRs) on cost efficiency in hospital medical-surgical units. Using panel data on California hospitals from 1998 to 2007, we employed stochastic frontier analysis (SFA) to estimate the relationships between EMR implementation and the cost inefficiency of medical-surgical units. We categorized EMR implementation into three stages based on the level of sophistication. We also examined the effects of specific EMR systems on cost inefficiency. Our SFA models addressed potential bias from unobserved heterogeneity and heteroskedasticity. EMR Stages 1 and 2, nursing documentation, electronic medication administration records, and clinical decision support were associated with significantly higher inefficiency.

Money for nothing? The net costs of medical training

One of the stages of medical training is the residency programme. Hosting institutions often claim compensation for the training provided. How much should this compensation be? According to our results, given the benefits arising from having residents among the house staff, no transfer (either tuition fee or subsidy) should be set to compensate the hosting institution for providing medical training. This paper quantifies the net costs of medical training, defined as the training costs over and above the wage paid. We jointly consider two effects. On the one hand, residents take extra time and resources from both the hosting institution and the supervisor. On the other hand, residents can be regarded as a less expensive substitute to nurses and/or graduate physicians, in the production of health care, both in primary care centres and hospitals. The net effect can be either positive or negative. We use the fact that residents, in Portugal, are centrally allocated to National Health Service hospitals to treat them as a fixed exogenous production factor. The data used comes from Portuguese hospitals and primary care centres. Cost function estimates point to a small negative marginal impact of residents on hospitals' (-0.02%) and primary care centres' (-0.9%) costs. Nonetheless, there is a positive relation between size and cost to the very large hospitals and primary care centres. Our approach to estimation of residents' costs controls for other teaching activities hospitals might have (namely undergraduate Medical Schools). Overall, the net costs of medical training appear to be quite small.

Cost and technical efficiency of German hospitals: does ownership matter?

This paper is the first to investigate both the technical and cost efficiency of more than 1500 German general hospitals. More specifically, it deals with the question how hospital efficiency varies with ownership, patient structure, and other exogenous factors, which are neither inputs to nor outputs of the production process. The empirical results for the years from 2001 to 2003 indicate that private and non-profit hospitals are on average less cost efficient and less technically efficient than publicly owned hospitals. The hospital rankings based on estimated efficiency scores turn out to be negatively correlated with average length of stay, which is highest in private hospitals. The results are derived by conducting a Stochastic Frontier Analysis assuming both Cobb-Douglas and translog production technologies and using a newly available and multifaceted administrative German data set.