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Health Economics Review
Published in: Health Economics Review 1/2018

Open Access 01-12-2018 | Research

Health care service provision in Europe and regional diversity: a stochastic metafrontier approach

Author: Katharina Schley

Published in: Health Economics Review | Issue 1/2018

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Abstract

■■■

In the last decades, demographic change coupled with new and expensive medical innovations have put most health care systems in developed countries under financial pressure. Therefore, ensuring efficient service provision is essential for a sustainable health care system. This paper investigates the performance of regional health care services in six West European countries between 2005 and 2014. We apply a stochastic metafrontier model to capture the different conditions in the health care systems in the countries within the European Union. By means of this approach, it is possible to detect performance differences in the European health care systems subject to different conditions and technologies relative to the potential technology available. The results indicate that regional deprivation plays a key role for the efficiency of health care provision. Furthermore, a pooled model which assumes a similar technology for all countries cannot sufficiently account for differences between countries. Surprisingly, the Scandinavian regions lag behind other regions with respect to the metafrontier.

JEL Classification

C23, D61, I12, I18, R10
Footnotes
1
For a more detailed discussion of the minimization problem in (6) see Battese et al. [4] and O’Donnell et al. [28].
 
2
For Germany, we approximate the number of physicians and hospital beds by the respective number on federal state level as no information on NUTS-2 level is available.
 
3
The test statistic for the LR test is LR=−2[ln(L(H0))−ln(L(H1))], where ln(L(H0)) is the log-likelihood value of a stochastic frontier model estimated by pooling the data for all countries, and ln(L(H1)) is the sum of the log-likelihood values of the country specific stochastic frontier models. The test statistic is χ2 distributed. The degrees of freedom are the difference between the number of parameters estimated in the individual stochastic frontier models and the number of parameters estimated in the pooled model.
 
4
The point estimates of technical efficiency for region i at time t are defined according to Battese and Coelli [3] as TE it =E(exp(−u it |ε it ) where ε it is the composite error term of the production function, i.e. ε it =v it −u it .
 
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Metadata
Title
Health care service provision in Europe and regional diversity: a stochastic metafrontier approach
Author
Katharina Schley
Publication date
01-12-2018
Publisher
Springer Berlin Heidelberg
Published in
Health Economics Review / Issue 1/2018
Electronic ISSN: 2191-1991
DOI
https://doi.org/10.1186/s13561-018-0195-5

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