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Measuring the Relative Performance of Providers of a Health Service

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  • Daniel A. Ackerberg
  • Matilde P. Machado
  • Michael H. Riordan

Abstract

A methodology is developed and applied to compare the performance of publicly funded agencies providing treatment for alcohol abuse in Maine. The methodology estimates a Wiener process that determines the duration of completed treatments, while allowing for agency differences in the effectiveness of treatment, standards for completion of treatment, patient attrition, and the characteristics of patient populations. Notably, the Wiener process model separately identifies agency fixed effects that describe differences in the effectiveness of treatment ('treatment effects'), and effects that describe differences in the unobservable characteristics of patients ('population effects'). The estimated model enables hypothetical comparisons of how different agencies would treat the same populations. The policy experiment of transferring the treatment practices of more cost-effective agencies suggests that Maine could have significantly reduced treatment costs without compromising health outcomes by identifying and transferring best practices.

Suggested Citation

  • Daniel A. Ackerberg & Matilde P. Machado & Michael H. Riordan, 2001. "Measuring the Relative Performance of Providers of a Health Service," NBER Working Papers 8385, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:8385
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    References listed on IDEAS

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    Cited by:

    1. Lindelow, Magnus & Wagstaff, Adam, 2003. "Health facility surveys : an introduction," Policy Research Working Paper Series 2953, The World Bank.
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    3. Lien, Hsien-Ming & Albert Ma, Ching-To & McGuire, Thomas G., 2004. "Provider-client interactions and quantity of health care use," Journal of Health Economics, Elsevier, vol. 23(6), pages 1261-1283, November.

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    More about this item

    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

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