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  • 12 - New Tools for Evaluating the Performance of Healthcare Providers Using DEA and FDH Estimators

  • Edited by Shawna Grosskopf, Oregon State University, Vivian Valdmanis, Western Michigan University, Valentin Zelenyuk, University of Queensland
  • Book:
    The Cambridge Handbook of Healthcare
    Published online:
    21 November 2024
    Print publication:
    28 November 2024, pp 351-403

  • Summary

    The hospital industry in many countries is characterized by right-skewed distributions of hospitals’ sizes and varied ownership types, raising numerous questions about the performance of hospitals of different sizes and ownership types. In an era of aging populations and increasing healthcare costs, evaluating and understanding the consumption of resources to produce healthcare outcomes is increasingly important for policy discussions. This chapter discusses recent developments in the statistical and econometric literature on DEA and FDH estimators that can be used to examine hospitals’ technical efficiency and productivity. Use of these new results and methods is illustrated by revisiting the Burgess and Wilson hospital studies of the 1990s to estimate and make inference about the technical efficiency of US hospitals, make inferences about returns to scale and other model features, and test for differences among US hospitals across ownership types and size groups in the context of a rigorous, statistical paradigm that was unavailable to researchers until recently.