Heterogeneity in Hospitals' Responses to a Financial Reform: A Random Coefficient Analysis of The Impact of Activity-Based Financing on Efficiency

Biorn, Erik and Hagen, Terje P. and Iversen, Tor and Magnussen, Jon (2006): Heterogeneity in Hospitals' Responses to a Financial Reform: A Random Coefficient Analysis of The Impact of Activity-Based Financing on Efficiency. Published in: HERO Working Paper No. 2006:9 (2006): pp. 1-34.

Abstract

The paper examines the heterogeneity with respect to the impact of a financial reform - Activity Based Financing (ABF) - on hospital efficiency in Norway. Measures of technical efficiency and of cost-efficiency are considered. The data set is from a contiguous ten-year panel of 47 hospitals covering both pre-ABF years and years after its imposition. Substantial heterogeneity in the responses, as measured by both estimated and predicted coefficients, is found. Rank correlations between the estimated/predicted coefficients of the ABF dummy and the pre-ABF/post-ABF efficiencies are examined. Overall, improvement seems to be more pronounced in technical efficiency than in cost-efficiency.

• Item Type: MPRA Paper
• Language: English
• Keywords: Health Econometrics; Panel Data; Hospital Efficiency; Activity-Based Financing, Random Coefficients; Heterogeneity; Rank Correlation
• Subjects: H - Public Economics > H5 - National Government Expenditures and Related Policies > H51 - Government Expenditures and Health; I - Health, Education, and Welfare > I1 - Health > I12 - Health Behavior; I - Health, Education, and Welfare > I1 - Health > I18 - Government Policy ; Regulation ; Public Health; C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C23 - Panel Data Models ; Spatio-temporal Models; C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C33 - Panel Data Models ; Spatio-temporal Models

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