Inquiry J Health Car
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Inquiry J Health Car · Mar 2003
Comparative StudyOwnership and changes in hospital inefficiency, 1986-1991.
This study examines how ownership affected changes in hospital inefficiency after the introduction of prospective payment by Medicare. Using a national data set, we estimate cost frontiers for 1986 and 1991 to assess hospitals' efficiency relative to best practice in both those years. ⋯ The results indicate that, in both 1986 and 1991, mean inefficiency was highest for for-profit hospitals and lowest for not-for-profit hospitals, with government hospitals falling in the middle. Moreover, between 1986 and 1991, both for-profit and government hospitals had significantly less improvement in efficiency than not-for-profit hospitals, all else equal.
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For many years, average bed occupancy level has been the primary measure that has guided hospital bed capacity decisions at both policy and managerial levels. Even now, the common wisdom that there is an excess of beds nationally has been based on a federal target of 85% occupancy that was developed about 25 years ago. This paper examines data from New York state and uses queueing analysis to estimate bed unavailability in intensive care units (ICUs) and obstetrics units. ⋯ Furthermore, given the model's assumptions, these estimates are likely to be conservative. These findings illustrate that if service quality is deemed important, hospitals need to plan capacity based on standards that reflect the ability to place patients in appropriate beds in a timely fashion rather than on target occupancy levels. Doing so will require the collection and analysis of operational data-such as demands for and use of beds, and patient delays--which generally are not available.