HERO On line Working Paper Series
Sverre A.C. Kittelsen
Hospital productivity and the Norwegian ownership reform – A Nordic comparative study
(), Jon Magnussen, Kjartan Sarheim Anthun, Unto Häkkinen, Miika Linna, Emma Medin, Kim Rose Olsen and Clas Rehnberg
Abstract: In a period where decentralisation seemed to be the
prominent trend, Norway in 2002 chose to re-centralise the hospital sector.
The reform had three main aims; cost control, efficiency and reduced
waiting times. This study investigates whether the hospital reform has
improved hospital productivity using the other four major Nordic countries
as controls. Hospital productivity measures are obtained using data
envelopment analysis (DEA) on a comparable dataset of 728 Nordic hospitals
in the period 1999 to 2004. First a common reference frontier is
established for the four countries, enveloping the technologies of each of
the countries and years. Bootstrapping techniques are applied to the
obtained productivity estimates to assess uncertainty and correct for bias.
Second, these are regressed on a set of explanatory variables in order to
separate the effect of the hospital reform from the effects of other
structural, financial and organizational variables. A fixed hospital effect
model is used, as random effects and OLS specifications are rejected.
Robustness is examined through alternate model specifications, including
stochastic frontier analysis (SFA). The SFA approach in performed using the
Battese & Coelli (1995) one stage procedure where the inefficiency term is
estimated as a function of the set of explanatory variables used in the
second stage in the DEA approach. Results indicate that the hospital reform
in Norway seems to have improved the level of productivity in the magnitude
of approximately 4 % or more. While there are small or contradictory
estimates of the effects of case mix and activity based financing, the
length of stay is clearly negatively associated with estimated
productivity. Results are robust to choice of efficiency estimation
technique and various definition of when the reform effect takes place.
Keywords: Efficiency; productivity; DEA; SFA; hospitals; (follow links to similar papers)
JEL-Codes: C14; D24; I12; (follow links to similar papers)
25 pages, June 2, 2009
Before downloading any of the electronic versions below
you should read our statement on
for viewing Postscript files and the
Acrobat Reader for viewing and printing pdf files.
Full text versions of the paper:
Questions (including download problems) about the papers in this series should be directed to Anbjørg Kolaas ()
Report other problems with accessing this service to Sune Karlsson ()
or Helena Lundin ().
Design by Joachim Ekebom