Health Care Management Science

, Volume 16, Issue 1, pp 27–36 | Cite as

Technical efficiency of Critical Access Hospitals: an application of the two-stage approach with double bootstrap

Article
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Abstract

The Critical Access Hospital (CAH) Program has offered Medicare cost-based reimbursement to small hospitals that meet certain eligibility criteria to improve their financial viability and quality of care. However, cost-based reimbursement has been associated with inefficiency in hospital operations. This study uses a two-stage approach and bootstrap procedures to examine the effects of environmental variables on the technical efficiency of CAHs. The two-stage approach with quality controls significantly improved statistical efficiency of parameter estimates in the second stage bootstrapped truncated regression relative to a similar model without quality controls. Overall, our results suggest that enhanced Medicare reimbursement may not have had detrimental effects on the technical efficiency of CAHs.

Keywords

Critical Access Hospitals Two-stage approach Technical efficiency Bootstrap 

MSC codes

62G05 62G07 62G09 62G10 62G15 62J99 
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Copyright information

© Springer Science+Business Media, LLC 2012

Authors and Affiliations

  • Iustin Cristian Nedelea
    • 1
  • James Matthew Fannin
    • 1
  1. 1.Department of Agricultural Economics and AgribusinessLouisiana State University Agricultural CenterBaton RougeUSA

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