title: Impact of HMO penetration and other environmental factors on hospital X-inefficiency.
abstract: This study examined the impact of health maintenance organization (HMO) market penetration and other internal and external environmental factors on hospital X-inefficiency in a national sample (N = 1,966) of urban U.S. hospitals in 1997. Stochastic frontier analysis, a frontier regression technique, was used to measure X-inefficiency and estimate parameters of the correlates of X-inefficiency. Log-likelihood restriction tests were used to test a variety of assumptions about the empirical model that guided its selection. Average estimated X-inefficiency in study hospitals was 12.96 percent. Increases in managed care penetration, dependence on Medicare and Medicaid, membership in a multihospital system, and location in areas where competitive pressures and the pool of uncompensated care are greater were associated with less X-inefficiency. Not-for-profit ownership was associated with increased X-inefficiency.
authors.affiliation: Widener University, USA.
authors.forename: M D
authors.initials: MD
authors.lastname: Rosko
mesh_terms: D002391:Catchment Area, Health / Q000706:statistics & numerical data; D003430:Cross-Sectional Studies; D003625:Data Collection; D017598:Efficiency, Organizational / Q000145:classification / Q000191:economics / Q000706:statistics & numerical data*; D019981:Health Care Sector; D006279:Health Maintenance Organizations / Q000706:statistics & numerical data*; D006302:Health Services Research; D006786:Hospitals, Urban / Q000191:economics / Q000458:organization & administration*; D008484:Medicaid; D006278:Medicare; D009096:Multi-Institutional Systems; D010067:Ownership; D013269:Stochastic Processes; D017664:Uncompensated Care; D014481:United States