Skip to main content
SpringerLink
Log in

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

  • Published:
Health Care Management Science Aims and scope Submit manuscript

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.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Notes

  1. We thank an anonymous referee for pointing this out.

References

  1. Centers for Medicare & Medicaid Services (2015) Home health services. www.medicare.gov/coverage/home-health-services.html#1367. Accessed 1 Dec 2014

  2. Centers for Medicare & Medicaid Services. National Health Expenditure Historical Data 1960–2012. Available via Centers for Medicare & Medicaid Services http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsHistorical.html. Accessed 1 Dec 2014

  3. Medicare Payment Advisory Committe (MedPAC) (2014) A Data Book - Health Care Spending and the Medicare Program June 2014. http://www.medpac.gov/documents/publications/jun14databookentirereport.pdf?sfvrsn=1. Accessed 12 Nov 2014

  4. Centers for Medicare & Medicaid SerVices (2012). National Health Expenditure Projections 2011–2021. http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/Proj2011PDF.pdf. Accessed 26 July 2012

  5. Centers for Disease Control and Prevention. National Home and Hospice Care Survey (NHHCS) 2007. Available via usa.gov http://www.cdc.gov/nchs/nhhcs/about_nhhcs.htm. Accessed 5 Dec 2014

  6. Dudzinski CS, Erekson OH, Ziegert AL (1998) Estimating an hedonic translog cost function for the home health care industry. Appl Econ 30(9):1259–1267

    Article  Google Scholar 

  7. Gonzales TI (1997) An empirical study of economies of scope in home healthcare. Health Serv Res 32(3):313–324

    Google Scholar 

  8. Hay JW, Mandes G (1984) Home health care cost-function analysis. Health Care Financ Rev 5(3):111–116

    Google Scholar 

  9. Kass DI (1987) Economies of scale and scope in the provision of home health services. J Health Econ 6(2):129–146

    Article  Google Scholar 

  10. Nyman JA, Dowd BE (1991) Cost function analysis of medicare policy: are reimbursement limits for rural home health agencies sufficient? J Health Econ 10(3):313–327

    Article  Google Scholar 

  11. Nyman JA, Svetlik MA (1989) Does the average cost of home health care vary with case mix? Public Health Rep 104(4):335–341

    Google Scholar 

  12. Mukamel DB, Fortinsky RH, White A, Harrington C, White LM, Ngo-Metzger Q (2014) The policy implications of the cost structure of home health agencies. Medicare Medicaid Res Rev 4(1):E1–E23

    Article  Google Scholar 

  13. Ozcan Y (2014) Health care benchmarking and performance evaluation: an assessment using Data Envelopment Analysis (DEA). Springer, New York

    Book  Google Scholar 

  14. Valdmanis V (1992) Sensitivity analysis for DEA models: an empirical example using public vs. NFP hospitals. J Publ Econ 48(2):185–205

    Article  Google Scholar 

  15. Ozcan Y, Woge S, Mau LW (1998) Efficiency evaluation of skilled nursing facilities. J Med Syst 22(4):211–224

    Article  Google Scholar 

  16. Rosko M, Chilingerian J, Zinn J, Aaronson W (1995) The effects of ownership, operating environment, and strategic choices on nursing home efficiency. Med Care 33(10):1001–1021

    Article  Google Scholar 

  17. Ozcan Y, Cotter J (1994) An assessment of efficiency of area agencies on aging in Virginia through data envelopment analysis. Gerontologist 34(3):363–370

    Article  Google Scholar 

  18. Ferrier G, Valdmanis V (2003) Exploring psychiatric hospital performance using data envelopment analysis and cluster analysis. J Econ Med 20(3):143–153

    Google Scholar 

  19. Simar L, Wilson PW (1998) Sensitivity analysis of efficiency scores: how to bootstrap in nonparametric frontier models. Manag Sci 44:49–61

    Article  Google Scholar 

  20. Simar L, Wilson PW (2007) Estimation and inference in two-stage, semi-parametric models of production processes. J Econ 136:31–64

    Article  Google Scholar 

  21. Politis DN, Romano JP (1994) large sample confidence regions based on subsamples under minimal assumptions. Ann Stat 22:2031–2050

    Article  Google Scholar 

  22. Politis DN, Romano JP (1999) Subsampling. Springer, New York

    Book  Google Scholar 

  23. Politis DN, Romano JP, Wolf M (2001) On the asymptotic theory of subsampling. Stat Sin 11:1105–1124

    Google Scholar 

  24. Bickel PJ, Sakov A (2008) On the choice of m in the m out of n bootstrap and confidence bounds for extrema. Stat Sin 18:967–985

    Google Scholar 

  25. Kneip A, Simar L, Wilson PW (2008) asymptotics and consistent bootstraps for dea estimators in non-parametric frontier models. Econ Theory 24:1663–1697

    Article  Google Scholar 

  26. Kneip A, Simar L, Wilson PW (2011) a computationally efficient, consistent bootstrap for inference with non-parametric dea estimators. Comput Econ 38:483–515

    Article  Google Scholar 

  27. Simar L, Wilson PW (2011) Inference by the m out of n bootstrap in nonparametric frontier models. J Prod Anal 36:33–53

    Article  Google Scholar 

  28. Färe R, Grosskopf S, Lovell CAK (1994) Production frontiers. Cambridge University Press, Cambridge

    Google Scholar 

  29. Farrell M (1957) The measurement of productive efficiency. J R Stat Soc Ser A, General 120:253–281

    Article  Google Scholar 

  30. Madigan EA, Fortinsky RH (2004) Interrater reliability of the outcomes and assessment information set: results from the field. Gerontologist 44(5):689–692

    Article  Google Scholar 

  31. Tullai-McGuinness S, Madigan EA, Fortinsky RH (2009) Validity testing the Outcomes and Assessment Information Set (OASIS). Home Health Care Ser Q 28(1):45–57

    Article  Google Scholar 

  32. Grosskopf SV, Valdmanis V (1987) Measuring hospital performance: a nonparametric approach. J Health Econ 6(2):89–107

    Article  Google Scholar 

  33. Madigan E, Schott D, Matthews C (2001) Rehospitalization among home healthcare patients: results of a prospective study. Home Health Nurse 19(5):298–305

    Article  Google Scholar 

  34. Mutter R, Valdmanis V, Rosko M (2010) High versus lower quality hospitals: a comparison of environmental characteristics and technical efficiency. Health Serv Outcome Res Method 10:134–153

    Article  Google Scholar 

  35. Rosko M (1999) Impact of internal and external environmental pressures on hospital inefficiency,”. Health Care Mgt Sci 2:63–74

    Article  Google Scholar 

  36. Rosko M (2001) Impact of HMO penetration and other environmental factors on hospital x-inefficiency. Med Care Res Rev 58(4):430–454

    Article  Google Scholar 

  37. Kelly D, Amburgey TL (1991) Organizational inertia and momentum: a dynamic model of strategic change. Acad Manag J 34(3):591–612

    Article  Google Scholar 

  38. Hollingsworth B (2003) Non-parametric and parametric applications measuring efficiency in health care. Health Care Manag Sci 6(4):203–218

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Economics, Grand Valley State University, Grand Rapids, MI, 49504, USA

    Vivian G. Valdmanis

  2. CNRS, IÉSEG School of Management, Univ. Lille, UMR 9221-LEM Lille Economie Management, F-59000, Lille, France

    Vivian G. Valdmanis & Hervé Leleu

  3. School of Business Administration, Widener University, Chester, PA, 19013, USA

    Michael D. Rosko

  4. School of Management, University of St. Andrews, St. Andrews, KY16 9RJ, Scotland, UK

    Michael D. Rosko

  5. Medicine-Division of General Internal Medicine, University of California, Irvine, CA, 92697-1835, USA

    Dana B. Mukamel

Authors
  1. Vivian G. Valdmanis
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Michael D. Rosko
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Hervé Leleu
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. Dana B. Mukamel
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Michael D. Rosko.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Valdmanis, V.G., Rosko, M.D., Leleu, H. et al. Assessing overall, technical, and scale efficiency among home health care agencies. Health Care Manag Sci 20, 265–275 (2017). https://doi.org/10.1007/s10729-015-9351-1

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10729-015-9351-1

Keywords

Search

Navigation