publication . Preprint . 2009

Hospital Competition, Technical Efficiency, and Quality

C. L. Chua; Alfons Palangkaraya; Jongsay Yong;
Open Access
  • Published: 01 Jun 2009
This paper studies the link between competition and technical efficiency of public hospitals in the State of Victoria, Australia by accounting both quantity and quality of hospital output using a two-stage semi-parametric model of hospital production and Data Envelopment Analysis. On the one hand, it finds a positive relationship between efficiency and competition measured by the Hirschman-Herfindahl Index (HHI). On the other, it finds that efficiency and the number of competing hospitals, in particular the number of competing private hospitals, to be negatively correlated. More importantly, it finds that whether or not quality is treated as an endogenous output...
free text keywords: hospital competition; technical efficiency; Hirschman-Herfindahl Index; data envelopment analysis; hospital quality, jel:I11, jel:D24, jel:D40
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