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KMID : 1170320130190040053
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Korean Journal of Health Economics and Policy
2013 Volume.19 No. 4 p.53 ~ p.77
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Impact of market competition on local public hospital performance: The two-stage DEA-Regression approach
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Cho Hyun-Min
Kim Youn-Hee
Kang Min-Ah
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Abstract
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Adopting market competition has been considered as an option to promote performance of public hospitals. Recent empirical evidences on the effect of market competition on public hospital performance, however, are still mixed. This study evaluated the relative technical efficiency of the local public hospitals in Korea using data envelopment analysis with data of 34 local public hospitals in Korea over the five year period from 2005 to 2009. The inputs used in this study to measure a hospital efficiency are the number of hospital bed as a proxy measure of a financial resource and three labor-related inputs that are number of doctors, nurses, and administrative staff. Four variables were identified as relevant output measures correlated with the inputs, which are number of inpatients, outpatients, patients used an emergency department, and patients underwent surgeries. Then, the Tobit model with the public hospital efficiency scores as a dependent variable were used to examine the relationship between environmental factors and public hospital performance. The results of efficiency analysis found that most local public hospitals are inefficient to maximize their outputs at the given input levels over five years. Categorically, local public hospitals, which are operated by government, are more efficient than those of the oppositive characteristics. We also found that a competitive market in the local areas has a negative effect on hospital efficiency.
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KEYWORD
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data envelopment analysis, efficiency, market competition, public hospital performance, tobit analysis
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