Cross Country Analysis of University Hospital Cost Efficiency in the Nordic Countries

Presenter: Emma Medin, LIME

Abstract

Background:
Previous research has pointed out that hospital provision of research and education interferes with patient care routines and inflates the costs of health care services, turning university hospitals into outliers in comparative efficiency analyses. While benchmarking of performances based on good quality data is an important tool for learning from best practice few studies has been conducted including empirical data representing teaching and research. Also, in small countries, the lack in availability to a suitable number of peers has limited the possibilities to perform such studies. However, the organisation of hospital care and the available data in the Nordic countries are highly similar creating a dataset of comparable decision making units at the university hospital level.

Objective:
In this study we analyse the cost efficiency of healthcare production including teaching and research activities at the university hospitals in Norway, Finland, Sweden and Denmark over a three year period. A secondary analysis with respect to different factors affecting the efficiency is conducted. The study is to our knowledge the first cross- country efficiency analysis including data for teaching and research.

Methodology and data:
Efficiency scores for the performance of 70 observations (31 university hospitals over the years 2002- 2004) are generated using bootstrapped Data Envelopment Analysis. Identical definitions for hospital outcomes and cost measures are used. Outcomes include patient care data adjusted for Diagnose Related Groups by using a common NordDRG- grouper, the number of interns and residents at each unit and the results from a bibliometric analysis including the indicators field- normalized- citation- score and top- 5- percent- publications. The hospital outcomes are matched to patient related costs and total costs for teaching and research. The efficiency scores are regressed on explanatory variables such as highly specialised care activities, length of stay and hospital market share.

Results:
When taking education and research activities into account the differences in cost efficiency at university hospital level are small but significant. Estimated efficiency scores reveal differences in both within country and across country comparisons. University hospitals with lower cost efficiency are characterized by relatively low volumes of patient care production, large shares of highly specialized care and longer patient length of stay. There is a marked difference in mean cost efficiency between Sweden and the rest of the Nordic countries.

Conclusions:
This study demonstrates differences in the productive efficiency of university hospitals in the Nordic countries. However, a substantial amount of variation at the country level remains unexplained.