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Performance of Belgian hospitals: A frontier approach

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  • Nathalie Bosmans
  • Fabienne Fecher

Abstract

The purpose of the paper is to measure and to compare performance of Belgian hospitals during the year 1991. In order to measure hospitals' efficiency, we estimate a resource function which is defined as the relationship between medical fees incurred in the treatment of a patient and the patient's pathology. From this relation, we construct a best practice reference frontier which defines the minimal hospital medical fees needed to treat the pathology. Efficiency is assessed relative to this resource frontier using a parametric stochastic method proposed by Schmidt and Sickles.9 It appears that some specializations (circulatory system) involve more overproduction than others. Among the other results, we note that public hospitals are more efficient than the private ones and that university hospitals tend to use more resources than regular hospitals. The relationships between efficiency and different variables (location, size, costs and management) are finally analysed.

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  • Nathalie Bosmans & Fabienne Fecher, 1995. "Performance of Belgian hospitals: A frontier approach," Health Economics, John Wiley & Sons, Ltd., vol. 4(5), pages 389-397, September.
    • Handle: RePEc:wly:hlthec:v:4:y:1995:i:5:p:389-397
    DOI: 10.1002/hec.4730040505
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    1. Rajiv D. Banker & Robert F. Conrad & Robert P. Strauss, 1986. "A Comparative Application of Data Envelopment Analysis and Translog Methods: An Illustrative Study of Hospital Production," Management Science, INFORMS, vol. 32(1), pages 30-44, January.
    2. Zuckerman, Stephen & Hadley, Jack & Iezzoni, Lisa, 1994. "Measuring hospital efficiency with frontier cost functions," Journal of Health Economics, Elsevier, vol. 13(3), pages 255-280, October.
    3. Schmidt, Peter & Sickles, Robin C, 1984. "Production Frontiers and Panel Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(4), pages 367-374, October.
    4. Greene, William H., 1980. "Maximum likelihood estimation of econometric frontier functions," Journal of Econometrics, Elsevier, vol. 13(1), pages 27-56, May.
    5. Becker, Edmund R & Sloan, Frank A, 1985. "Hospital Ownership and Performance," Economic Inquiry, Western Economic Association International, vol. 23(1), pages 21-36, January.
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    Cited by:

    1. Galina Besstremyannaya, 2011. "Managerial performance and cost efficiency of Japanese local public hospitals: A latent class stochastic frontier model," Health Economics, John Wiley & Sons, Ltd., vol. 20(S1), pages 19-34, September.
    2. Valentin Zelenyuk & Zhichao Wang, 2023. "Random vs. Explained Inefficiency in Stochastic Frontier Analysis: The Case of Queensland Hospitals," CEPA Working Papers Series WP052023, School of Economics, University of Queensland, Australia.
    3. Pierre Pestieau & Henry-Jean Gathon, 1996. "La performance des entreprises publiques. Une question de propriété ou de concurrence ?," Revue Économique, Programme National Persée, vol. 47(6), pages 1225-1238.
    4. Piet Verheyen, 1998. "The Missing Link in Budget Models of Nonprofit Institutions: Two Practical Dutch Applications," Management Science, INFORMS, vol. 44(6), pages 787-800, June.
    5. Suraratdecha, Chutima & Okunade, Albert A., 2006. "Measuring operational efficiency in a health care system: A case study from Thailand," Health Policy, Elsevier, vol. 77(1), pages 2-23, June.
    6. Sherman T. Folland & Richard A. Hofler, 2001. "How reliable are hospital efficiency estimates? Exploiting the dual to homothetic production," Health Economics, John Wiley & Sons, Ltd., vol. 10(8), pages 683-698, December.
    7. Jaume Puig‐Junoy, 1998. "Technical efficiency in the clinical management of critically ill patients," Health Economics, John Wiley & Sons, Ltd., vol. 7(3), pages 263-277, May.

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