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The European Journal of Health Economics
Published in: The European Journal of Health Economics 3/2015

Open Access 01-04-2015 | Original Paper

Examining variations in hospital productivity in the English NHS

Authors: Adriana Castelli, Andrew Street, Rossella Verzulli, Padraic Ward

Published in: The European Journal of Health Economics | Issue 3/2015

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Abstract

Objectives

Numerous papers have measured hospital efficiency, mainly using a technique known as data envelopment analysis (DEA). A shortcoming of this technique is that the number of outputs for each hospital generally outstrips the number of hospitals. In this paper, we propose an alternative approach, involving the use of explicit weights to combine diverse outputs into a single index, thereby avoiding the need for DEA.

Methods

Hospital productivity is measured as the ratio of outputs to inputs. Outputs capture quantity and quality of care for hospital patients; inputs include staff, equipment, and capital resources applied to patient care. Ordinary least squares regression is used to analyse why output and productivity varies between hospitals. We assess whether results are sensitive to consideration of quality.

Results

Hospital productivity varies substantially across hospitals but is highly correlated year on year. Allowing for quality has little impact on relative productivity. We find that productivity is lower in hospitals with greater financial autonomy, and where a large proportion of income derives from education, research and development, and training activities. Hospitals treating greater proportions of children or elderly patients also tend to be less productive.

Conclusions

We have set out a means of assessing hospital productivity that captures their multiple outputs and inputs. We find substantial variation in productivity among English hospitals, suggesting scope for productivity improvement.
Appendix
Available only for authorised users
Footnotes
1
We are grateful to one of the referees for guidance in arriving at this formulation.
 
2
The following mergers took place in 2009/10. Queen Elizabeth Hospital NHS Trust (RG2), Bromley Hospitals NHS Trust (RG3) and Queen Mary’s Sidcup NHS Trust (RGZ) merged to become South London Healthcare NHS Trust (RYQ), while Worthing and Southlands Hospitals NHS Trust (RPL) and Royal West Sussex NHS Trust (RPR) merged to form Western Sussex Hospitals NHS Trust (RYR).
 
3
For one hospital, the Lewisham Hospital NHS Trust, all values for waiting times are missing.
 
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Metadata
Title
Examining variations in hospital productivity in the English NHS
Authors
Adriana Castelli
Andrew Street
Rossella Verzulli
Padraic Ward
Publication date
01-04-2015
Publisher
Springer Berlin Heidelberg
Published in
The European Journal of Health Economics / Issue 3/2015
Print ISSN: 1618-7598
Electronic ISSN: 1618-7601
DOI
https://doi.org/10.1007/s10198-014-0569-5

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