Facoltà di scienze economiche

The temporal variation of cost-efficiency in Switzerland’s hospitals : an application of mixed models

Farsi, Mehdi

This paper examines the temporal variation of cost efficiency in Switzerland’s general hospitals. The variation of total costs and the number of empty beds has been analyzed using a sample of 168 hospitals operating from 1998 to 2003. In addition more than 100,000 observations form the inpatient data disaggregated to DRG categories have been used to analyze the variations in the length of... Plus

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    Summary
    This paper examines the temporal variation of cost efficiency in Switzerland’s general hospitals. The variation of total costs and the number of empty beds has been analyzed using a sample of 168 hospitals operating from 1998 to 2003. In addition more than 100,000 observations form the inpatient data disaggregated to DRG categories have been used to analyze the variations in the length of hospital stays across hospitals and over time. The adopted econometric specification is based on a mixed effects model, including individual fixed effects to account for the timeinvariant unobserved heterogeneity and random coefficients representing different patterns of temporal variations across hospitals and DRG categories. The analyses aim at identifying different trends of efficiency changes across various types of hospitals regarding ownership and subsidization status and among different regions. The results of this paper indicate that hospitals have adopted measures to curtail hospitalizations and reduce empty beds, but the extent and effectiveness of these measures vary significantly across individual hospitals. While pointing to certain differences among cantons, the results do not provide any evidence in favor of a particular ownership type or subsidization regime. Moreover, while generally supporting the fact that decreasing empty beds has been used as an effective cost-cutting strategy, the data do not provide any conclusive evidence for the cost-savings expected from shortening hospitalizations.