Health Care Management Science

, Volume 8, Issue 2, pp 149–156

The Cost Efficiency and Clinical Quality of Institutional Long-Term Care for the Elderly

  • Juha Laine
  • Miika Linna
  • Anja Noro
  • Unto Häkkinen


This study applied the stochastic frontier cost function with inefficiency effects to estimate the association between quality of care and cost efficiency in institutional long-term care wards for the elderly in Finland. We used several clinical quality indicators for indicating adverse care processes and outcomes, based on the Resident Assessment Instrument (RAI)/Minimum Data Set (MDS). Average cost inefficiency among the wards was 22%. We found an association between the clinical quality indicators and cost inefficiency. Higher prevalence of pressure ulcers was associated with higher costs, whereas the higher prevalence of use of depressants and hypnotics increased inefficiency.


cost efficiency stochastic frontier long-term care resident assessment instrument minimum data set 


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Copyright information

© Springer Science + Business Media, Inc. 2005

Authors and Affiliations

  • Juha Laine
    • 1
  • Miika Linna
    • 1
  • Anja Noro
    • 1
  • Unto Häkkinen
    • 1
  1. 1.Centre for Health Economics at Stakes—CHESSHelsinki

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