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Financial incentives and productive efficiency in Finnish health centres

Author

Listed:
  • Kalevi Luoma
  • Maija‐Liisa Järviö
  • Ilpo Suoniemi
  • Reino T. Hjerppe

Abstract

This paper examines the productive efficiency of Finnish health centres by applying data envelopment analysis (DEA) and econometric methods. The Tobit model was used in an attempt to find out how various economic, structural and demographic factors affect efficiency. The dependent variable of the model, the coefficient of inefficiency, was obtained by deducting the DEA efficiency score from one. According to the results, a high percentage of funding coming from central government matching grants and high taxable income per inhabitant are significant predictors of inefficiency. The results suggest that more generous resources tend to increase inefficiency since they may lessen incentives for tight cost and performance control. A high share of doctors and a low share of administrative, maintenance and support personnel promote efficiency. A low population share of the elderly and a long distance to the nearest hospital are positively associated with inefficiency.

Suggested Citation

  • Kalevi Luoma & Maija‐Liisa Järviö & Ilpo Suoniemi & Reino T. Hjerppe, 1996. "Financial incentives and productive efficiency in Finnish health centres," Health Economics, John Wiley & Sons, Ltd., vol. 5(5), pages 435-445, September.
    • Handle: RePEc:wly:hlthec:v:5:y:1996:i:5:p:435-445
    DOI: 10.1002/(SICI)1099-1050(199609)5:53.0.CO;2-Y
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    References listed on IDEAS

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    Cited by:

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    2. Margherita Neri & Patricia Cubi-Molla & Graham Cookson, 2022. "Approaches to Measure Efficiency in Primary Care: A Systematic Literature Review," Applied Health Economics and Health Policy, Springer, vol. 20(1), pages 19-33, January.
    3. Maude Laberge & Walter P. Wodchis & Jan Barnsley & Audrey Laporte, 2016. "Efficiency of Ontario primary care physicians across payment models: a stochastic frontier analysis," Health Economics Review, Springer, vol. 6(1), pages 1-10, December.
    4. Baohong Li & Yingdong Huo & Shi Yin, 2022. "Sustainable Financing Efficiency and Environmental Value in China’s Energy Conservation and Environmental Protection Industry under the Double Carbon Target," Sustainability, MDPI, vol. 14(15), pages 1-25, August.
    5. Kalinichenko, Olena & Amado, Carla A.F. & Santos, Sérgio P., 2022. "Exploring the potential of Data Envelopment Analysis for enhancing pay-for-performance programme design in primary health care," European Journal of Operational Research, Elsevier, vol. 298(3), pages 1084-1100.
    6. Miika Linna, 1998. "Measuring hospital cost efficiency with panel data models," Health Economics, John Wiley & Sons, Ltd., vol. 7(5), pages 415-427, August.
    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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