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Frontier Estimation Methods as Management Tools in Health Care Production: A Case of Staff Utilization in Danish Orthopaedic Surgery Units

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  • Hougaard, Jens Leth

    (Institute of Economics, University of Copenhagen)

  • Overgaard, Christian

    (Finanstilsynet)

Abstract

The practical problems related to quantifying the production of health care services and registering quality differences makes the use of frontier estimation methods such as Data Envelopment Analysis (DEA) and Stochastic Frontier Analysis (SFA) somewhat problematic when applied to analysing hospital reimbursement schemes. Consequently, the general attitude among health economists has been sceptical concerning the value of these methods for regulatory purposes. Recent methodological developments, however, have emphasized that the frontier estimation methods are helpful tools for management of the individual production units rather than useful regulatory devices. The present paper tries to review and discuss one such theoretical development called Multi-directional Efficiency Analysis, and the potential usefulness as a management tool is illustrated using a data set of Danish orthopaedic surgery units.

Suggested Citation

  • Hougaard, Jens Leth & Overgaard, Christian, 2006. "Frontier Estimation Methods as Management Tools in Health Care Production: A Case of Staff Utilization in Danish Orthopaedic Surgery Units," Nationaløkonomisk tidsskrift, Nationaløkonomisk Forening, vol. 2006(1), pages 377-392.
    • Handle: RePEc:hhs:jdaecn:0156
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    Keywords

    Frontier Estimation Methods; productive efficiency; healthcare; Orthopaedic Surgery;
    All these keywords.

    JEL classification:

    • A10 - General Economics and Teaching - - General Economics - - - General

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