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An Analysis of Efficiency and Productivity in Swiss Hospitals

Author

Listed:
  • Mehdi Farsi
  • Massimo Filippini
Abstract
This paper examines the productive efficiency of the hospital sector in Switzerland. A panel data of 214 general hospitals over the four-year period between 1998 and 2001 has been analyzed. A descriptive analysis of the data casts some light on differences across hospital types especially regarding case mix severity and length of hospitalizations. The final sample used for the cost frontier analysis consists of 459 observations from 156 hospitals that is, an unbalanced panel with an average length of three years. The adopted methodology is based on a stochastic total cost frontier with a Cobb-Douglas functional form. Given the limited number of periods and the sample?s low within variation, a pooled cross-sectional model has been used. Several specifications have been considered. The main outputs are measured by the DRGadjusted number of hospitalizations and the hospital?s outpatient revenues. Services of capital, physicians and other employees are considered as input factors. The cost frontier analysis suggests a significant potential for improving efficiency. The results also point to unexploited scale economies in the majority of the sample. An analysis of inefficiency estimates indicates that the differences among various ownershipsubsidization types are not statistically significant.

Suggested Citation

  • Mehdi Farsi & Massimo Filippini, 2006. "An Analysis of Efficiency and Productivity in Swiss Hospitals," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 142(I), pages 1-37, March.
    • Handle: RePEc:ses:arsjes:2006-i-1
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    More about this item

    Keywords

    Stochastic Frontier; Cost Efficiency; General Hospitals;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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