Assessing overall, technical, and scale efficiency among home health care agencies.

ABSTRACT

While home health care agencies (HHAs) play a vital role in the production of health, little research has been performed gauging their efficiency. Employing a robust approach to data envelopment analysis (DEA) we assessed overall, technical, and scale efficiency on a nationwide sample of HHAs. After deriving the three efficiency measures, we regressed these scores on a variety of environmental factors. We found that HHAs, on average, could proportionally reduce inputs by 28 % (overall efficiency), 23 % (technical efficiency) and 6 % (scale efficiency). For-profit ownership was positively associated with improvements in overall efficiency and technical efficiency and chain ownership was positively associated with global efficiency. There were also state-by-state variations on all the efficiency measures. As home health becomes an increasingly important player in the health care system, and its share of national health expenditures increases, it has become important to understand the cost structure of the industry and the potential for efficiencies. Therefore, further research is recommended as this sector continues to grow.