Cost-containment policies and hospital efficiency: evidence from a panel of Italian hospitals

Atella VincenzoBelotti FedericoDaidone SilvioIlardi GiuseppeMarini Giorgia
CEIS Research Paper
The main objective of this article is to evaluate to which extent the set of national and regional cost control policies implemented in recent years in Italy have affected hospital activity. Our contribution is mainly empirical as we focus our attention on the impact that policies like hospital mergers and regional bailout plans had on inefficiency. We use a rich longitudinal sample of Italian hospitals over the period 1999-2007 and perform a Bayesian analysis of the random-effects stochastic frontier model proposed by Greene (2005), allowing for a one-step estimation of both production frontier parameters and inefficiency effects. Results show that hospital inefficiency has changed over time and that part of this change could be ascribed to the mentioned policies.
Number: 228
Keywords: Hospital efficiency, Stochastic frontiers, Bayesian inference, Policy evaluation
JEL codes: C23; I11; L23
Date: Friday, April 13, 2012
Revision Date: Friday, April 13, 2012