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The impact of internal markets on health care efficiency : Evidence from health care reforms in Sweden

Gerdtham, U. G. LU ; Rehnberg, C. and Tambour, M. (1999) In Applied Economics 31(8). p.935-945
Abstract

A purchaser/provider split together with output-based reimbursement were recently introduced by several Swedish county councils. These changes have been motivated by arguments of efficiency and consumer choice. This paper tests the null hypothesis that hospital services are provided as efficiently by county councils with internal markets and output-based reimbursement as by county councils with budget reimbursement. We first estimate technical efficiency using data envelopment analysis and then we regress the efficiency scores as the dependent variable on new internal organizations in a multiple regression by use of pooled cross-section data for the 26 county councils for two years (1993 and 1994). The results reject our null hypothesis... (More)

A purchaser/provider split together with output-based reimbursement were recently introduced by several Swedish county councils. These changes have been motivated by arguments of efficiency and consumer choice. This paper tests the null hypothesis that hospital services are provided as efficiently by county councils with internal markets and output-based reimbursement as by county councils with budget reimbursement. We first estimate technical efficiency using data envelopment analysis and then we regress the efficiency scores as the dependent variable on new internal organizations in a multiple regression by use of pooled cross-section data for the 26 county councils for two years (1993 and 1994). The results reject our null hypothesis and we conclude that the organizational changes in the county councils improve health care efficiency. Our results further indicate that the potential savings in costs due to a hypothetical switch from budget based allocation to an output based allocation is about 13%. We also found some evidence indicating that county councils with a nonsocialist political majority are relatively more efficient than those with a socialist regime and that large county councils are more efficient than small county councils.

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author
publishing date
type
Contribution to journal
publication status
published
subject
in
Applied Economics
volume
31
issue
8
pages
11 pages
publisher
Routledge
external identifiers
  • scopus:0032885188
ISSN
0003-6846
DOI
10.1080/000368499323652
language
English
LU publication?
no
id
f81200b4-6cc9-4d3e-a804-692eb40a21f7
date added to LUP
2018-10-09 12:27:59
date last changed
2019-01-06 14:08:51
@article{f81200b4-6cc9-4d3e-a804-692eb40a21f7,
  abstract     = {<p>A purchaser/provider split together with output-based reimbursement were recently introduced by several Swedish county councils. These changes have been motivated by arguments of efficiency and consumer choice. This paper tests the null hypothesis that hospital services are provided as efficiently by county councils with internal markets and output-based reimbursement as by county councils with budget reimbursement. We first estimate technical efficiency using data envelopment analysis and then we regress the efficiency scores as the dependent variable on new internal organizations in a multiple regression by use of pooled cross-section data for the 26 county councils for two years (1993 and 1994). The results reject our null hypothesis and we conclude that the organizational changes in the county councils improve health care efficiency. Our results further indicate that the potential savings in costs due to a hypothetical switch from budget based allocation to an output based allocation is about 13%. We also found some evidence indicating that county councils with a nonsocialist political majority are relatively more efficient than those with a socialist regime and that large county councils are more efficient than small county councils.</p>},
  author       = {Gerdtham, U. G. and Rehnberg, C. and Tambour, M.},
  issn         = {0003-6846},
  language     = {eng},
  month        = {01},
  number       = {8},
  pages        = {935--945},
  publisher    = {Routledge},
  series       = {Applied Economics},
  title        = {The impact of internal markets on health care efficiency : Evidence from health care reforms in Sweden},
  url          = {http://dx.doi.org/10.1080/000368499323652},
  volume       = {31},
  year         = {1999},
}