The Focus Efficiency of U.S. Hospitals

Hospital productivity has been a research topic for over two decades. Whereas much has been learned regarding cost, technical, scale, and allocative efficiency as well as the impact that weakly disposable inputs/outputs have on hospital behavior, we expand on this research by examining size and serv...

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Bibliographic Details
Published in:Atlantic economic journal 2013-09, Vol.41 (3), p.241-263
Main Authors: Ferrier, Gary D., Leleu, Hervé, Moises, James, Valdmanis, Vivian G.
Format: Article
Language:English
Subjects:
Certificates of need
Cost control
Cost reduction
Data envelopment analysis
Economic aspects
Economic efficiency
Economics
Economics and Finance
Economies of scope
Efficiency
Forecasts and trends
Health care expenditures
Health care industry
Health care policy
Health economics
Hospital management
Humanities and Social Sciences
International Economics
Macroeconomics/Monetary Economics//Financial Economics
Management
Medical care, Cost of
Metropolitan areas
Microeconomics
Productivity
Public Finance
U.S.A
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Summary:Hospital productivity has been a research topic for over two decades. Whereas much has been learned regarding cost, technical, scale, and allocative efficiency as well as the impact that weakly disposable inputs/outputs have on hospital behavior, we expand on this research by examining size and service offering, or focus, efficiency at the metropolitan area level for US hospitals. By using an extension of the Free Coordination Hull (FCH), we are able to determine whether hospitals in our sample could become more efficient if they provided more services (reduce inefficiency due to too narrow a focus) or fewer services (reduce inefficiency due to too broad a focus). Our results suggest that findings vary among the hospital markets. This approach could be used by policy makers and managers in order to reduce costs by sharing services, reducing services in hospitals, or expanding services in hospitals. Findings from a study such as this should aid reform programs by providing more information on the sources of hospital inefficiency.
ISSN:0197-4254
1573-9678
DOI:10.1007/s11293-013-9385-z