Abstract
We specify a Bayesian, geoadditive Stochastic Frontier Analysis (SFA) model to assess hospital performance along the dimensions of resources and quality of stroke care in German hospitals. With 1,100 annual observations and data from 2006 to 2013 and risk-adjusted patient volume as output, we introduce a production function that captures quality, resource inputs, hospital inefficiency determinants and spatial patterns of inefficiencies. With high relevance for hospital management and health system regulators, we identify performance improvement mechanisms by considering marginal effects for the average hospital. Specialization and certification can substantially reduce mortality. Regional and hospital-level concentration can improve quality and resource efficiency. Finally, our results demonstrate a trade-off between quality improvement and resource reduction and substantial regional variation in efficiency.
Highlights
Most OECD countries are characterized by a steady increase of hospital expenditures, which account for a substantial and increasing share of overall health care costs [1,2,3]
We focus on fspat offering a geoadditive resolution of quality of health care and add the following assumptions to facilitate model identification and interpretation: (i) The predictors for sÃu, σv contain solely intercepts while mÃu is set to zero, and (ii) metric covariates are modelled linearly to capture effects of such variables by a single slope coefficient
We analyze spatial patterns of inefficiencies in care provision when controlling for unobservable local conditions of hospital efficiency
Summary
Most OECD countries are characterized by a steady increase of hospital expenditures, which account for a substantial and increasing share of overall health care costs [1,2,3]. Increasing cost pressures have triggered concerns that hospitals face a trade-off between quantity of patients treated and quality of care provided [4,5,6,7]. The importance of hospital quality in managerial decision-making, policy-making, and health economics research is increasing. Hospitals have to optimize the relationship between cost and quality in order to provide high quality services using as few resources as possible. Hospital clinical and administrative managers today often have to decide where to reduce resource investments while ensuring continued high levels of service
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