Provision of health care services and regional diversity in Germany: insights from a Bayesian health frontier analysis with spatial dependencies.

The German health care system is among the most patient-oriented systems in Europe. Nevertheless, distinct utilisation patterns, access barriers due to socio-economic profiles, and potentials of misallocation of medical resources lead to disparities in the provision of health care services. We analyse how a possible over- and undersupply of services and the utilisation of and the access to the health care system relate to regional variations in the population's well-being. For this purpose, we employ a recent Bayesian stochastic frontier approach that allows for spatial dependence structures. Our results indicate that patient migration plays an important role in contributing to regional differences in the utilisation of the medical infrastructure. As a consequence, policy should take spatial patterns of health care utilisation into account to improve the allocation of medical resources.

Quality and resource efficiency in hospital service provision: A geoadditive stochastic frontier analysis of stroke quality of care in Germany.

We specify a Bayesian, geoadditive Stochastic Frontier Analysis (SFA) model to assess hospital performance along the dimensions of resources and quality of stroke care in German hospitals. With 1,100 annual observations and data from 2006 to 2013 and risk-adjusted patient volume as output, we introduce a production function that captures quality, resource inputs, hospital inefficiency determinants and spatial patterns of inefficiencies. With high relevance for hospital management and health system regulators, we identify performance improvement mechanisms by considering marginal effects for the average hospital. Specialization and certification can substantially reduce mortality. Regional and hospital-level concentration can improve quality and resource efficiency. Finally, our results demonstrate a trade-off between quality improvement and resource reduction and substantial regional variation in efficiency.

Improving health care service provision by adapting to regional diversity: An efficiency analysis for the case of Germany.

The provision of health care in Germany exhibits sizeable geographic variation with a heterogeneous allocation of medical services in rural and urban areas. Furthermore, distinct utilisation patterns and access barriers due to the socio-economic environment might cause inefficiencies in the provision of health care services. Accordingly, an improved understanding of factors governing inefficiencies in health care provision is likely to benefit an efficient spatial allocation of health care infrastructure. We analyse how socio-economic factors influence the regional distribution of (in)efficiencies in the provision of health care services by means of a stochastic frontier analysis. Our results highlight that regional deprivation relates to inefficient provision of health care services. As a consequence, policies should also consider socio-economic conditions to improve the allocation of medical services and overall health.

Hospital efficiency under prospective reimbursement schemes: an empirical assessment for the case of Germany.

The introduction of prospective hospital reimbursement based on diagnosis-related groups (DRG) has been a conspicuous attempt to decelerate the steady increase of hospital expenditures in the German health sector. In this work, the effect of the financial reform on hospital efficiency is subjected to empirical testing by means of two complementary testing approaches. On the one hand, we apply a two-stage procedure based on non-parametric efficiency measurement. On the other hand, a stochastic frontier model is employed that allows a one-step estimation of both production frontier parameters and inefficiency effects. To identify efficiency gains as a consequence of changes in the hospital incentive structure, we account for technological progress, spatial dependence and hospital heterogeneity. The results of both approaches do not reveal any increase in overall efficiency after the DRG reform. In contrast, a significant decline in overall hospital efficiency over time is observed.

Health care and ideology: a reconsideration of political determinants of public healthcare funding in the OECD.

In this article, we examined if partisan ideology and electoral motives influence public healthcare expenditure (HCE) in countries of the Organization for Economic Cooperation and Development. We distinguished between the effects on the growth of the expenditures and its adjustment to violations of a long-run equilibrium linking HCE with macroeconomic and demographic trends. Regarding the influence of partisan ideology, we found that if governments are sufficiently long in power, right-wing governments spend less on public health than their left-wing counterparts. Furthermore, if a right-wing party governs without coalition partners, it responds more strongly to deviations from the long-run HCE equilibrium than left-wing governments. With regard to electoral motives, we found that health expenditure increases in years of elections. Independent of their partisan ideology, single-party (minority) governments induce higher (lower) growth of public HCE. Each of these political factors by its own may increase (decrease) HCE growth by approximately one percentage point. Given an average annual growth of HCE of approximately 4.1%, political factors turn out to be important determinants of trends in public HCE.

On the effect of prospective payment on local hospital competition in Germany.

The introduction of prospective hospital reimbursement based on diagnosis related groups (DRG) in 2004 has been a conspicuous attempt to increase hospital efficiency in the German health sector. As a consequence of the reform a rise of competition for (low cost) patients could be expected. In this paper the competition between hospitals, quantified as spatial spillover estimates of hospital efficiency, is analyzed for periods before and after the reform. We implement a two-stage efficiency model that allows for spatial interdependence among hospitals. Hospital efficiency is determined by means of non-parametric and parametric econometric frontier models. We diagnose a significant increase of negative spatial spillovers characterizing hospital performance in Germany, and thus, confirm the expected rise of competition.

The determinants of health-care expenditure: new results from semiparametric estimation.

Recent cross-country studies have questioned the existence of a systematic relationship between per capita health-care expenditure (HCE) and explanatory variables such as income, population ageing and total public expenditure. We reexamine this issue mainly focussing at a flexible semiparametric estimation method that allows the parameters of the model to depend on a state variable. Using the age structure of the population as the state variable, we find that the income elasticity increases with population ageing, while other explanatory variables are not significantly influenced by it. Additionally we find that the HCE relationship becomes more and more unstable in ageing economies. These results explain the difficulty to identify both the influence of population ageing and income on HCE in previous studies. Furthermore they indicate that international convergence of HCE across countries crucially depends on the convergence of the population age structure. We also discuss the policy implications of our results regarding the design of a fair health-care financing system and the evolution of HCE to avoid budgetary problems.

The determinants of health care expenditure: testing pooling restrictions in small samples.

Health care expenditure has increased substantially in all Western industrialized countries in the last decades. The necessity to contain the increase in health care expenditure has motivated the analysis of its determinants to explain differences across countries and health systems. However, recent studies have questioned the use of cross section data arguing that health systems are too different to allow for such comparisons. In this paper we investigate whether this criticism is really justified. We analyze the variations of health care expenditure in OECD countries relative to income, population aging and technological change. Our analysis is based on pooled cross section data and time series. Firstly, formulating error correction models for individual countries we demonstrate that in almost all cases the investigated variables are cointegrated. Secondly, we use a bootstrap framework for inference and examine whether the influence of explanatory variables is unique across countries. Applying recursive estimation procedures we find evidence for cross country homogeneity during the period 1961-1979. In the last two decades health care dynamics become more and more country specific thus indicating divergence of health systems and the growing importance of country-specific effects in the explanation of differences in health care expenditure.