Market oriented reforms of health services: A non-parametric analysis

The Impact of Public Reporting Schemes and Market Competition on Hospital Efficiency

In the wake of growing attempts to assess the validity of public reporting, much research has examined the effectiveness of public reporting regarding cost or quality of care. However, relatively little is known about whether transparency through public reporting significantly influences hospital efficiency despite its emerging expectations for providing value-based care. This study aims to identify the dynamics that transparency brought to the healthcare market regarding hospital technical efficiency, taking the role of competition into account. We compare the two public reporting schemes, All-Payer Claims Database (APCD) and Hospital Compare. Employing Data Envelopment Analysis (DEA) and a cross-sectional time-series Tobit regression analysis, we found that APCD is negatively associated with hospital technical efficiency, while hospitals facing less competition responded significantly to increasingly transparent information by enhancing their efficiency relative to hospitals in more competitive markets. We recommend that policymakers take market mechanisms into consideration jointly with the introduction of public reporting schemes in order to produce the best outcomes in healthcare.

The measurement of efficiency and productivity of health care delivery

The measurement of efficiency and productivity of health service delivery has become a small industry. This is a review of 317 published papers on frontier efficiency measurement. The techniques used are mainly based on non-parametric data envelopment analysis, but there is increasing use of parametric techniques, such as stochastic frontier analysis. Applications to hospitals and other health care organizations and areas are reviewed and summarised, and some meta-type analysis undertaken. Cautious conclusions are that public provision may be potentially more efficient than private, in certain settings. The paper also considers conceptualizations of efficiency, and points to dangers and opportunities in generating such information. Finally, some criteria for assessing the use and usefulness of efficiency studies are established, with a view to helping both researchers and those assessing whether or not to act upon published results.