Cost inefficiency under financial strain: a stochastic frontier analysis of hospitals in Washington State through the Great Recession

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.

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An Exploration of Factors Influencing Cost Inefficiency in Swedish Electricity Distribution using Stochastic Frontier Analysis

SSRN Electronic Journal ◽

10.2139/ssrn.1029586 ◽

2007 ◽

Author(s):

Magnus Söderberg

Keyword(s):

Stochastic Frontier Analysis ◽

Stochastic Frontier ◽

Electricity Distribution ◽

Frontier Analysis ◽

Factors Influencing ◽

Cost Inefficiency

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Hospital Inefficiency: What is the Impact of Membership in Different Types of Systems?

INQUIRY The Journal of Health Care Organization Provision and Financing ◽

10.5034/inquiryjrnl_44.3.335 ◽

2007 ◽

Vol 44 (3) ◽

pp. 335-349 ◽

Cited By ~ 30

Author(s):

Michael D. Rosko ◽

Jose Proenca ◽

Jacqueline S. Zinn ◽

Gloria J. Bazzoli

Keyword(s):

Health Systems ◽

Hospital Cost ◽

Stochastic Frontier Analysis ◽

Stochastic Frontier ◽

Primary Objective ◽

Decentralized Systems ◽

Frontier Analysis ◽

Different Types ◽

Cost Inefficiency ◽

The Impact

The primary objective of this study is to assess whether systematic differences in inefficiency are associated with hospital membership in different types of systems. We employed the Battese/Coelli simultaneous stochastic frontier analysis (SFA) technique to estimate hospital cost inefficiency. Mean estimated inefficiency was 8.42%. Membership in different types of systems was related to estimated cost inefficiency (p < .05). Compared to hospitals that were members of centralized health systems, membership in centralized physician/insurance or decentralized systems was associated with decreased inefficiency; membership in independent systems was associated with increased inefficiency.

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Determinants of Cost Inefficiency of Maize Farming in Different Agro-climatic Regions of Sikkim, India

International Journal of Rural Management ◽

10.1177/0973005220942612 ◽

2020 ◽

Vol 16 (2) ◽

pp. 177-198

Author(s):

Pradyut Guha ◽

Tiken Das

Keyword(s):

Cost Function ◽

Best Practice ◽

Stochastic Frontier Analysis ◽

Stochastic Frontier ◽

Minimum Cost ◽

Primary Data ◽

Frontier Analysis ◽

Farm Level ◽

Climatic Regions ◽

Cost Inefficiency

The present study makes an attempt to analyse farm level cost inefficiency of maize farming and its determinants in different agro-climatic regions of Sikkim. The primary data for the study were collected during the third and fourth quarter of 2018 from different agro-climatic regions of Sikkim. Both data envelopment and stochastic frontier analysis were used for measurement of the farm level inefficiency across different agro-climatic regions of the study area. Based on the Cobb–Douglas cost function for maize output, the article simultaneously estimated stochastic frontier cost function and examined the effect of exogenous factors on farm level cost inefficiency. The results of this study showed that, on an average, the farmer incurred cost which was 8 per cent to 72 per cent above the minimum cost defined by the best practice frontier. Further, cost inefficiency was relatively higher among the farmers in temperate agro-climatic region. Greater cost inefficiency seems to be directly associated with remoteness of farmland from input market. The study also found that the additional years of farming experience and farming in the rented plots were useful in reducing cost inefficiency.

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