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Hospital efficiency under global budgeting: evidence from Taiwan

Author

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  • Hung-pin Lai

    (National Chung Cheng University)

  • Meng-Chi Tang

    (National Chung Cheng University)

Abstract

Global budgeting sets a predetermined cap to restrain health expenditure, but the fixed budget for medical providers could result in less efficient services. This paper measures hospital efficiency under global budgeting using simultaneous stochastic frontier analysis, stressing that physicians and dentists within a hospital were under separate budgets in Taiwan. Empirical results show that hospital efficiency was not improved after global budgeting, and physicians were found to be less efficient than dentists. The physicians and dentists within the same hospital were also found to be less integrated after global budgeting. Empirical results show that a joint analysis improves the estimation efficiency from separate analysis and suggest that the aggregate inefficiency came mostly from physicians in hospitals that were small, public, non-teaching, located in small markets and had a low market share. Except for public hospitals, physicians and dentists in the above hospitals were also found to be less integrated.

Suggested Citation

  • Hung-pin Lai & Meng-Chi Tang, 2018. "Hospital efficiency under global budgeting: evidence from Taiwan," Empirical Economics, Springer, vol. 55(3), pages 937-963, November.
    • Handle: RePEc:spr:empeco:v:55:y:2018:i:3:d:10.1007_s00181-017-1317-3
    DOI: 10.1007/s00181-017-1317-3
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    References listed on IDEAS

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    Cited by:

    1. Li Xiang & Zhengdong Zhong & Junnan Jiang, 2022. "The Response of Different-Levels Public Hospitals to Regional Global Budget with a Floating Payment System: Evidence from China," IJERPH, MDPI, vol. 19(23), pages 1-11, November.
    2. Meng-Chi Tang & Yi-Nong Wu, 2020. "Medical providers as double agents in a universal health care system: evidence from generic pharmaceutical adoption in Taiwan," Empirical Economics, Springer, vol. 59(1), pages 169-203, July.
    3. Lin, Lee-Kai, 2022. "Effects of a global budget payment scheme on medical specialty workforces," Social Science & Medicine, Elsevier, vol. 309(C).

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    More about this item

    Keywords

    Hospital efficiency; Global budgeting; Stochastic frontier analysis; Universal health care;
    All these keywords.

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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