Abstract
With hospital budgets remaining tight and healthcare expenditure rising due to demographic change and advances in technology, hospitals continue to face calls to contain costs and allocate their resources more efficiently. In this context, efficiency has emerged as an increasingly important way for hospitals to withstand competitive pressures in the hospital market. Doing so, however, can be challenging given unpredictable fluctuations in demand, a prime example of which are emergencies, i.e. urgent medical cases. The link between medical urgency and hospitals’ efficiency, however, has been neglected in the literature to date. This study therefore aims to investigate the relationship between hospitals’ urgency characteristics and their efficiency. Our analyses are based on 4094 observations from 1428 hospitals throughout Germany for the years 2015, 2016, and 2017. We calculate an average urgency score for each hospital based on all cases treated in that hospital per year and also investigate the within-hospital dispersion of medical urgency. To analyze the association of these urgency measures with hospitals’ efficiency we use a two-stage double bootstrap data envelopment analysis approach with truncated regression. We find a negative relationship between the urgency score and hospital efficiency. When testing for non-linear effects, the results reveal a u-shaped association, indicating that having either a high or low overall urgency score is beneficial in terms of efficiency. Finally, our results reveal that higher within-hospital urgency dispersion is negatively related to efficiency.
Highlights
Enhancing efficiency has become an increasingly important way for hospitals to deal with the growing competitive pressures in hospital markets
We find non-linear effects for this relationship. & Looking at the dispersion of medical urgency within a hospital, we see that efficiency losses are detrimental in hospitals treating both low and high urgency cases. & Policy makers, researchers and practitioners are welladvised to acknowledge the influence of medical urgency in assessing hospital performance
One of the key finding of this study indicates that having a case composition, in which either elective care or emergency care predominates, positively influences hospitals’ efficiency
Summary
Enhancing efficiency has become an increasingly important way for hospitals to deal with the growing competitive pressures in hospital markets. Unpredictable fluctuations in demand can make it challenging for hospitals to operate efficiently [1, 2]. Such fluctuations are driven in particular by a disproportionate increase in emergency cases in many healthcare systems. In contrast to elective cases, which can usually be pre-arranged and are highly predictable, demand for emergency cases is less predictable [3, 6]. Since the composition of cases differs between hospitals, i.e. some hospitals treat relatively more urgent cases than others, the question whether urgency characteristics of hospitals’ case composition affect hospitals’ efficiency seems to be very pressing
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