Scandinavian Working Papers in Economics

HERO On line Working Paper Series,
Oslo University, Health Economics Research Programme

No 2013:4: Decomposing the productivity differences between hospitals in the Nordic countries

Sverre A.C. Kittelsen (), Benny Adam Persson , Clas Rehnberg , Kjartan S. Anthun , Fanny Goude , Hanna Rättö , Øyvind Hope , Unto Häkkinen , Emma Medin , Birgitte Kalseth and Jannie Kilsmark
Additional contact information
Sverre A.C. Kittelsen: Frisch Centre
Benny Adam Persson: Frisch Centre
Clas Rehnberg: Karolinska Institutet, Stockholm
Kjartan S. Anthun: SINTEF
Fanny Goude: Karolinska Institutet
Hanna Rättö: National Institute for Health and Welfare – THL, Helsinki
Øyvind Hope: SINTEF
Unto Häkkinen: National Institute for Health and Welfare – THL, Helsinki
Emma Medin: Karolinska Institutet, Stockholm
Birgitte Kalseth: SINTEF
Jannie Kilsmark: Danish Institute of health research, Copenhagen

Abstract: Previous studies indicate that Finnish hospitals have significantly higher productivity than in the other Nordic countries. We decompose the productivity levels into technical efficiency, scale efficiency and country specific possibility sets (technical frontiers). Data have been collected on operating costs and patient discharges in each DRG group for all hospitals in the Nordic countries. We find that there are small differences in scale and technical efficiency between countries, but large differences in production possibilities (frontier position). The results are robust to the choice of bootstrapped Data Envelopment Analysis (DEA) or Stochastic Frontier Analysis (SFA) as frontier estimation methodology.

Keywords: Productivity; Hospitals; Efficiency; DEA; SFA

JEL-codes: C14; I12

29 pages, January 23, 2014

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