Hospital productivity bias when not adjusting for cost heterogeneity: The case of Spain

dc.contributor.authorArvelo, Alejandro
dc.contributor.authorDíaz, Juan José
dc.contributor.authorAbásolo, Ignacio
dc.date.accessioned2022-06-30T16:52:20Z
dc.date.available2022-06-30T16:52:20Z
dc.date.issued2019
dc.description.abstractThis research quantifies the bias caused in hospital productivity measurements when cost heterogeneity is not considered. A multi-output stochastic cost frontier under a normalised translog specification is used to approximate the structure of technology of a sample of public general hospitals in Spain during the period 2002-2009. To control for observable heterogeneity in costs, a set of variables related to hospital characteristics are included in the cost frontier specification (i.e., hospital complexity, degree of specialisation, availability of outpatient clinics, variety of high-technology equipment available, teaching activity and quality of care), whereas unobservable heterogeneity is accounted for by means of individual dummy variables. A measure of hospitals' cost efficiency is first obtained, and the analysis is then completed by measuring and decomposing the total factor productivity index (TFP-I) change. Findings reveal that controlling for heterogeneity decreases total productivity from an annual average rate of 0.028% to 1.330%, mainly driven by the negative contribution of the cost efficiency change component. Hence, a bias of 1.303 percentage points in the overall TFP-I is found as consequence of not controlling for heterogeneity. In addition to this, if heterogeneity factors are not accounted for, the mean cost efficiency index during the period analysed is 0.730, figure that increases up to 0.974 if heterogeneity is considered. Hence, the omission of heterogeneity leads to a bias of 24.4 percentage points in the mean cost efficiency. Therefore, not adjusting for heterogeneity in costs gives rise to distorted measurements of hospital productivity, as well as distortions in the contribution of each of its components, which may lead to the adoption of inadequate policies and decisions on resource allocationes
dc.description.versionVersión publicadaes
dc.identifier.citationArvelo-Martín A, Díaz-Hernández JJ, Abásolo-Alessón I. Hospital productivity bias when not adjusting for cost heterogeneity: The case of Spain. PLoS One. 2019 Jun 18;14(6):e0218367. doi:10.1371/journal.pone.0218367es
dc.identifier.urihttps://doi.org/10.1371/journal.pone.0218367es
dc.identifier.urihttp://hdl.handle.net/11447/6276
dc.language.isoenes
dc.subjectCost-Benefit Analysis / economicses
dc.subjectEfficiencyes
dc.subjectEfficiency, Organizational / economicses
dc.subjectHospital Costses
dc.subjectHospitals, Public / economicses
dc.subjectHumanses
dc.subjectSpain / epidemiologyes
dc.titleHospital productivity bias when not adjusting for cost heterogeneity: The case of Spaines
dc.typeArticlees
dcterms.sourcePloS onees

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