Cost Efficiency in Primary Care Contracting: A Stochastic Frontier Cost Function Approach

UPF Working Paper No. 719

35 Pages Posted: 12 Jul 2004

See all articles by Jaume Puig-Junoy

Jaume Puig-Junoy

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences

Vicente Ortun

Universitat Pompeu Fabra - Department of Economics and Business

Date Written: July 2003

Abstract

The principal aim of this paper is to estimate a stochastic frontier cost function and an inefficiency effects model in the analysis of the primary health care services purchased by the public authority and supplied by 180 providers in 1996 in Catalonia. The evidence from our sample does not support the premise that contracting out has helped improve purchasing cost efficiency in primary care. Inefficient purchasing cost was observed in the component of this purchasing cost explicitly included in the contract between purchaser and provider. There are no observable incentives for the contracted-out primary health care teams to minimise prescription costs, which are not explicitly included in the present contracting system.

Keywords: Primary health care, purchasing cost efficiency, frontier models

JEL Classification: H51, I18

Suggested Citation

Puig-Junoy, Jaume and Ortun, Vicente, Cost Efficiency in Primary Care Contracting: A Stochastic Frontier Cost Function Approach (July 2003). UPF Working Paper No. 719, Available at SSRN: https://ssrn.com/abstract=563242 or http://dx.doi.org/10.2139/ssrn.563242

Jaume Puig-Junoy (Contact Author)

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain

Vicente Ortun

Universitat Pompeu Fabra - Department of Economics and Business ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain
(34) 93 542 18 57 (Phone)
(34) 93 542 17 46 (Fax)

HOME PAGE: http://www.econ.upf.edu/~ortun/

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