Hospital Competition, Technical Efficiency and Quality

17 Pages Posted: 31 May 2011

See all articles by Chew Lian Chua

Chew Lian Chua

University of Melbourne - Melbourne Institute: Applied Economic & Social Research

Alfons Palangkaraya

Centre for Transformative Innovation, Faculty of Business and Law, Swinburne University of Technology

Jongsay Yong

University of Melbourne - Melbourne Institute: Applied Economic & Social Research

Date Written: June 2011

Abstract

This paper studies the link between competition and technical efficiency of public hospitals in the state of Victoria, Australia. It finds a positive relationship between efficiency and competition as measured by the Hirschman–Herfindahl Index (HHI) and a negative relationship when the number of competing private hospitals is used instead of HHI. It also finds that whether or not quality is treated as an endogenous output variable influences the statistical estimates of the link between efficiency and competition. The findings point to possibly undesirable resource allocation effects when public hospitals are made to compete with a large number of private hospitals.

Keywords: D24, D40, I11

Suggested Citation

Chua, Chew Lian and Palangkaraya, Alfons and Yong, Jongsay, Hospital Competition, Technical Efficiency and Quality (June 2011). Economic Record, Vol. 87, Issue 277, pp. 252-268, 2011, Available at SSRN: https://ssrn.com/abstract=1854168 or http://dx.doi.org/10.1111/j.1475-4932.2010.00704.x

Chew Lian Chua (Contact Author)

University of Melbourne - Melbourne Institute: Applied Economic & Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia
83443728 (Phone)

Alfons Palangkaraya

Centre for Transformative Innovation, Faculty of Business and Law, Swinburne University of Technology ( email )

AGSE Building
Room 117
Hawthorne, Victoria 3121
Australia
+61392145826 (Phone)

Jongsay Yong

University of Melbourne - Melbourne Institute: Applied Economic & Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia
+613-83445354 (Phone)
+613-83445630 (Fax)

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