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Analyzing Differences in Rural Hospital Efficiency: A Data Envelopment Analysis Approach

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  • Nedelea, I. Cristian
  • Fannin, James Matthew
  • Barnes, James N.

Abstract

This study analyzes difference in efficiency among the U.S. rural hospitals using a two-stage, semi-parametric approach. Data Envelopment Analysis is used in the first stage to calculate cost, technical and allocative efficiencies of Critical Access Hospitals (CAH) and non-CAH rural hospitals. Following Simar and Wilson (2007), bootstrapped truncated regressions are used in the second stage to infer on relationship between the cost, technical and allocative inefficiencies of hospitals and some environmental variables. The estimated results show that CAHs are less cost, technical and allocative efficient than non-CAH rural hospitals. The results also show that Medicare cost-based reimbursement for CAHs has a negative effect on the efficiency of these hospitals while Medicare prospective payment system for non-CAH rural hospitals has a positive effect on hospital efficiency.

Suggested Citation

  • Nedelea, I. Cristian & Fannin, James Matthew & Barnes, James N., 2010. "Analyzing Differences in Rural Hospital Efficiency: A Data Envelopment Analysis Approach," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61391, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea10:61391
    DOI: 10.22004/ag.econ.61391
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    References listed on IDEAS

    as
    1. Jacobs,Rowena & Smith,Peter C. & Street,Andrew, 2006. "Measuring Efficiency in Health Care," Cambridge Books, Cambridge University Press, number 9780521851442, September.
    2. Simar, Leopold & Wilson, Paul W., 2007. "Estimation and inference in two-stage, semi-parametric models of production processes," Journal of Econometrics, Elsevier, vol. 136(1), pages 31-64, January.
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    Cited by:

    1. Asandului, Laura & Roman, Monica & Fatulescu, Puiu, 2013. "The Efficiency of Healthcare Systems in Europe: a Data Envelopment Analysis Approach," MPRA Paper 58954, University Library of Munich, Germany, revised Apr 2014.
    2. Vitezić Neda & Cankar Stanka Setnikar & Linšak Željko, 2019. "Effectiveness Measurement Using DEA & BSC Methods in Public Health Services," NISPAcee Journal of Public Administration and Policy, Sciendo, vol. 12(1), pages 199-216, June.

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