Measuring hospital efficiency: a comparison of two approaches.
OBJECTIVE
To compare the results of scoring hospital efficiency by means of two new types of frontier models, Data Envelopment Analysis (DEA) and stochastic frontier regression (SFR).


METHODS
Financial records of Florida acute care hospitals in continuous operation over the period 1982-1993.


METHODS
Comparable DEA and SFR models are specified, and these models are then estimated to obtain the efficiency indexes yielded by each. The empirical results are subsequently examined to ascertain the extent to which they serve the needs of hospital policymakers.


METHODS
A longitudinal or panel data set is assembled, and a common set of output, input, and cost indicators is constructed to support the estimation of comparable DEA and SFR models.


RESULTS
DEA and SFR models yield convergent evidence about hospital efficiency at the industry level, but divergent portraits of the individual characteristics of the most and least efficient facilities.


CONCLUSIONS
Hospital policymakers should not be indifferent to the choice of the frontier model used to score efficiency relationships. They may be well advised to wait until additional research clarifies reasons why DEA and SFR models yield divergent results before they introduce these methods into the policy process.
Chirikos
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H. Lee Moffitt Cancer Center and Research Institute, Cancer Control Moffitt Research Center, University of South Florida, Tampa 33612-9497, USA.
Sear
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D001509:Bed Occupancy / Q000706:statistics & numerical data; D003627:Data Interpretation, Statistical; D003953:Diagnosis-Related Groups / Q000145:classification / Q000191:economics; D017598:Efficiency, Organizational / Q000592:standards*; D005431:Florida; D006302:Health Services Research / Q000379:methods*; D006739:Hospital Administration / Q000592:standards* / Q000639:trends; D006801:Humans; D007902:Length of Stay / Q000706:statistics & numerical data; D008137:Longitudinal Studies; D015233:Models, Statistical; D012044:Regression Analysis; D015203:Reproducibility of Results