Facoltà di scienze economiche

Cost and scale efficiency in the nursing home sector : evidence from Switzerland

Filippini, Massimo

This paper examines costs in the nursing home industry, an issue of concern to Swiss policy makers because of the explosion of elderly care costs and the aging of the population. Moreover, the fact that Swiss nursing homes are managed by different forms of institutional organizations (private for-profit nursing homes, government nursing homes and nonprofit nursing homes) raises the issue of their... More

Add to personal list
    Summary
    This paper examines costs in the nursing home industry, an issue of concern to Swiss policy makers because of the explosion of elderly care costs and the aging of the population. Moreover, the fact that Swiss nursing homes are managed by different forms of institutional organizations (private for-profit nursing homes, government nursing homes and nonprofit nursing homes) raises the issue of their relative cost efficiency. The paper considers an estimation of a deterministic frontier cost model and two versions of a stochastic frontier cost model. A translog cost function was estimated using panel data for a sample of 38 nursing homes for elderly people operating over the period 1993-1995 in the Canton Ticino, which is located in the Italian-speaking part of Switzerland. Using a set of dummy variables, quality differences and differences in the forms of institutional organization are considered. The results of this analysis show that the institutional form influences the relative costefficiency of the nursing home.