Characteristics of High- and Low-Efficiency Hospitals. (August 2018)

• Record Type: Journal Article
• Authors: Rosko, Michael; Wong, Herbert S.; Mutter, Ryan
• Is Part Of: Medical care research and review. Volume 75:Number 4(2018)
• Page Start: 454
• Page End: 478
• Publication Date: 2018-08
• Subjects: hospital efficiency -- stochastic frontier analysis -- hospital quality -- patient safety; Medical care -- United States -- Periodicals; Medical care -- Periodicals; Medical care -- Research -- United States -- Periodicals; Medical care -- Research -- Periodicals; Medical economics -- United States -- Periodicals; Medical economics -- Periodicals; 362.10973
• DOI: 10.1177/1077558716689197
• Languages: English
• ISSNs: 1077-5587

Abstract

We compared performance, operating characteristics, and market environments of low- and high-efficiency hospitals in the 37 states that supplied inpatient data to the Healthcare Cost and Utilization Project from 2006 to 2010. Hospital cost-inefficiency estimates using stochastic frontier analysis were generated. Hospitals were then grouped into the 100 most- and 100 least-efficient hospitals for subsequent analysis. Compared with the least efficient hospitals, high-efficiency hospitals tended to have lower average costs, higher labor productivity, and higher profit margins. The most efficient hospitals tended to be nonteaching, investor-owned, and members of multihospital systems. Hospitals in the high-efficiency group were located in areas with lower health maintenance organization penetration and less competition, and they had a higher share of Medicaid and Medicare admissions. Results of the analysis suggest there are opportunities for public policies to support improved efficiency in the hospital sector.