Skip to main content
SpringerLink
Log in

An examination of competition and efficiency for hospital industry in Turkey

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

Abstract

The two particular reforms that have been undertaken under the Health Transformation Program in Turkey are enhancing efficiency and increasing competition. However, there is a lack of information about the relationship between competition and hospital efficiency. The purpose of this paper is to analyze the effect of competition on technical efficiency for the hospital industry in Turkey. The target population included all public and private general hospitals that were open in 2010 in Turkey (n = 1,224). From these, 1,103 hospitals met the selection criteria and were included in the study. Data were obtained from the Turkish Statistical Institute, the Ministry of Health, and through a field survey. Technical efficiency of hospitals was estimated using Data Envelopment Analysis with five outputs and five inputs. The intensity of competition among hospitals was measured by objective and subjective measures. Objective competition was measured using the Hirschman-Herfindahl Index, and subjective competition was measured based on the perceptions of top level hospital managers. Multivariate Tobit regression was used to investigate the relationship between competition and efficiency while controlling the effects of demand and supply characteristics of the market and the hospital traits. Efficiency results showed that 17 % of hospitals were technically efficient. Regression analyses portrayed that the degree of competition among general hospitals did not have a statistically significant relationship with hospitals’ technical efficiency. To conclude, hospital efficiency in Turkey does not seem to be affected by the intensity of competition among hospitals.

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

References

  1. Safavi K (2006) Paying for efficiency. J Healthc Manag 51(2):77–80

    PubMed  Google Scholar 

  2. Başara BB, Güler C, Yentür GK et al. (2013) Ministry of Health Statistical Yearbook of Health 2012. Ankara, Turkey

  3. www.sgk.gov.tr Accessed 21 May 2014

  4. OECD & IBRD/World Bank (2008) OECD Health System Reviews Turkey. Paris

  5. Cabiedes L, Guillen A (2001) Adopting and adapting managed competition: health care reform in Southern Europe. Soc Sci Med 52:1205–17

    Article  CAS  PubMed  Google Scholar 

  6. Agartan TI (2012) Marketization and universalism: crafting the right balance in the Turkish healthcare system. Curr Sociol 60(4):456–71

    Article  Google Scholar 

  7. Ersoy K, Kavuncubaşı Ş, Ozcan YA, Harris J (1997) Technical efficiencies of Turkish hospitals: DEA approach. J Med Syst 21(2):167–74

    Article  Google Scholar 

  8. Sahin I, Ozcan YA (2000) Public sector hospital efficiency for provincial markets in Turkey. J Med Syst 24(6):307–20

    Article  CAS  PubMed  Google Scholar 

  9. Sahin I, Ozcan YA, Ozgen H (2011) Assessment of hospital efficiency under health transformation program in Turkey. Cent Europ J Oper Re 19(1):19–37

    Article  Google Scholar 

  10. Torun N (2010) Development of competition in Turkish healthcare system and an assessment of its effect on hospital efficiency and quality. Dissertation, Hacettepe University

  11. Ozcan YA (2014) Health care benchmarking and performance evaluation: an assessment using data envelopment analysis (DEA), 2nd edn. Springer, New York

    Google Scholar 

  12. Clarkson K, Miller RL (1982) Industrial organization: theory, evidence, and public policy. McGraw-Hill Book Company, USA

    Google Scholar 

  13. Leibenstein H (1973) Competition and x-efficiency: a reply. J Polit Econ 81:765–77

    Article  Google Scholar 

  14. Ozgen H, Ozcan YA (2002) National study of efficiency for dialysis centers: an examination of market competition and facility characteristics for production of multiple dialysis outputs. Health Serv Res 37:711–29

    Article  PubMed Central  PubMed  Google Scholar 

  15. Rosko MD (2001) Impact of HMO penetration and other environmental factors on hospital X-inefficiency. Med Care Res Rev 58:430–54

    Article  CAS  PubMed  Google Scholar 

  16. Brown HS (2003) Managed care and technical efficiency. Health Econ 12:149–58

    Article  PubMed  ADS  Google Scholar 

  17. Bates LJ, Mukherjee K, Santerre RE (2006) Market structure and technical efficiency in the hospital services industry: a DEA approach. Med Care Res Rev 63:499–524

    Article  PubMed  Google Scholar 

  18. Morrisey MA (2001) Competition in hospital and health insurance markets: a review and research agenda. Health Serv Res 36(1):191–221

    PubMed Central  CAS  PubMed  Google Scholar 

  19. Joskow PL (1980) The effects of competition and regulation on hospital bed supply and the reservation quality of the hospital. Bell J Econ 11:421–47

    Article  Google Scholar 

  20. Robinson JC, Luft HS (1985) The impact of hospital market structure on patient volume, average length of stay, and the cost of care. J Health Econ 4(4):333–56

    Article  CAS  PubMed  Google Scholar 

  21. Ozcan YA (1995) Efficiency of hospital service production in local markets: the balance sheet of U.S. medical armament. Socio Econ Plan Sci 29(2):139–150

    Article  Google Scholar 

  22. Rosko MD (2001) Cost efficiency of US hospitals: a stochastic frontier approach. Health Econ 10(6):539–51

    Article  CAS  PubMed  Google Scholar 

  23. Rosko MD (2004) Performance of U.S. teaching hospitals: a panel analysis of cost inefficiency. Health Care Manag Sci 7:7–16

    Article  PubMed  Google Scholar 

  24. Carey K (1997) A panel data design for estimation of hospital cost functions. Rev Econ Statistics 79(3):443–53

    Article  Google Scholar 

  25. Kessler D, Mcclellan M (2000) Is hospital competition socially wasteful? Q J Econ 115:577–615

    Article  MATH  Google Scholar 

  26. Cooper Z, Gibbons S, Jones S, McGuire A (2010) Does hospital competition improve efficiency? an analysis of the recent market-based reforms to the English NHS. CEP Discussion Paper No 988. http://cep.lse.ac.uk/pubs/download/dp0988.pdf. Accessed 11 February 2013

  27. Chu CL, Chiang TL, Chang RE (2011) Hospital competition and inpatient services efficiency in Taiwan: A longitudinal study. Health Econ 20(10):1268–80

    Article  PubMed  Google Scholar 

  28. Biorn E, Hagen TP, Eversen T, Magnussen J (2003) The effect of activity based financing on hospital efficiency: A panel data analysis of DEA efficiency scores 1992–2000. Health Care Manag Sci 6:271–83

    Article  PubMed  Google Scholar 

  29. Zuckerman HS (1979) Multi-institutional systems: promise and performance. Inquiry 16(4):291–314

    CAS  PubMed  Google Scholar 

  30. Büyükkayıkçı H, Sahin I (2000) The comparative MoH payment list with SSI ulus hospital surgical services patient costs. Hacettepe Saglık İdare Derg 5(3):119–148

    Google Scholar 

  31. Mutter RL, Wong HS, Goldfarb MG (2008) The effects of hospital competition on inpatient quality of care. Inquiry 45(3):263–79

    PubMed  Google Scholar 

  32. Bernstein AB, Gauthier AK (1998) Defining competition in markets: why and how? Health Serv Res 33(5):1421–1438

    PubMed Central  CAS  PubMed  Google Scholar 

  33. Gowrisankaran G, Town R (2003) Competition, payers, and hospital quality. Health Serv Res 38:1403–21

    Article  PubMed Central  Google Scholar 

  34. Keeler EB, Melnick G, Zwanziger J (1999) The changing effects of competition on non-profit and for-profit hospital pricing behavior. J Health Econ 18:69–86

    Article  CAS  PubMed  Google Scholar 

  35. Luft HS, Maerki SC (1984) The competitiveness of hospital markets. Contemp Policy Issue 3(2):89–102

    Article  Google Scholar 

  36. Baker LC (2001) Measuring competition in health care markets. Health Serv Res 36(1):223–251

    PubMed Central  CAS  PubMed  Google Scholar 

  37. Zinn JS, Weech RW, Brannon D (1998) Resource dependence and institutional elements in nursing home TQM adoption. Health Serv Res 33(2):261–75

    PubMed Central  CAS  PubMed  Google Scholar 

  38. Valdmanis VG, Rosko MD, Mutter RL (2008) Hospital quality, efficiency, and input slack differentials. Health Serv Res 43(5):1830–48

    Article  PubMed Central  PubMed  Google Scholar 

  39. Ozcan YA, Luke RD, Haksever C (1992) Ownership and organizational performance. Med Care 30(9):781–794

    Article  CAS  PubMed  Google Scholar 

  40. Hirth RA (1997) Competition between for-profit and nonprofit health care providers: can it help achieve social goals? Med Care Res Rev 54(4):414–38

    Article  CAS  PubMed  Google Scholar 

  41. Ozcan YA, Luke RD (1993) A national study of the efficiency of hospitals in urban markets. Health Serv Res 27:719–40

    PubMed Central  CAS  PubMed  Google Scholar 

  42. Cooper WW, Seiford LM, Tone K (2007) Introduction to data envelopment analysis and its uses: with DEA solver software and references. Springer, New York

    Google Scholar 

  43. Chilingerian JA (1995) Evaluating physician efficiency in hospitals: a multivariate analysis of best practices. Eur J Oper Res 80(3):548–74

    Article  MATH  Google Scholar 

  44. OECD (2011) Health at a Glance 2011: OECD Indicators http://dx.doi.org/10.1787/health_glance-2011-en. OECD Publishing

  45. Shortell SM, Morrsion EM, Hughes SL et al (1986) The effects of hospital ownership on nontraditional services. Health Affair 5:97–110

    Article  CAS  Google Scholar 

  46. Tuckman HP, Chang CF (1988) Cost convergence between for-profit and not-for-profit nursing homes: does competition matter? Q Rev Econ Bus 28(4):50–65

    Google Scholar 

  47. Schlesinger M, Dorwart R, Hoover C, Epstein S (1997) Competition, ownership, and access to hospital services: evidence from psychiatric hospitals. Med Care 35(9):974–92

    Article  CAS  PubMed  Google Scholar 

  48. Mukamel D, Zwanziger J, Tomaszewski K (2001) HMO penetration, competition, and risk-adjusted hospital mortality. Health Serv Res 36:1019–1035

    PubMed Central  CAS  PubMed  Google Scholar 

  49. Clement JP, Valdmanis VG, Bazzoli GJ, Zhao M, Chukmaitov A (2008) Is more better? an analysis of hospital outcomes and efficiency with a DEA model of output congestion. Health Care Manag Sci 11:67–77

    Article  PubMed  Google Scholar 

  50. Nayar P, Ozcan YA (2008) Data envelopment analysis comparison of hospital efficiency and quality. J Med Syst 32:193–9

    Article  PubMed  Google Scholar 

  51. Donabedian A (1988) The quality of care: how can it be assessed? J Am Med Assoc 260:1743–48

    Article  CAS  Google Scholar 

  52. Keeler EB, Rubenstein LV et al (1992) Hospital characteristics and quality of care. J Am Med Assoc 268:1709–14

    Article  CAS  Google Scholar 

  53. Schultz MA, van Servellen G et al (1998) The relationship of hospital structural and financial characteristics to mortality and length of stay in acute myocardial ınfarction patients. Outcomes Manag Nursing Prac 2:130–36

    CAS  Google Scholar 

  54. Folland ST, Hofler RA (2001) How reliable are hospital efficiency estimates? exploiting the dual to homothetic production. Health Econ 10(8):693–98

    Article  Google Scholar 

  55. Wennberg JE, Fisher ES et al (2005) Evaluating the efficiency of california providers in caring for patients with chronic illnesses. Health Affair 24:526–43

    Google Scholar 

  56. Bijlsma M, Koning P, Shestalova V, Aouragh A (2010) The effect of competition on process and outcome quality of hospital care: an empirical analysis for the Netherlands. CPB Discussion Paper No 157. CPB Netherlands Bureau for Economic Policy Analysis, The Hague.

  57. Ozcan YA, Legg JS (2014) Performance measurement for radiology providers: a national study. Int J Health Techno Manag 14(3):209–221

    Article  Google Scholar 

  58. Angela Testi A, Fareed N, Ozcan YA, Tanfani E (2014) Assessment of physician performance for diabetes: a bias-corrected DEA model. Quality in Primary Care 21(6):345–357

    Google Scholar 

  59. Kacak H, Ozcan YA, Kavuncubasi SA (2014) New examination of hospital performance after health care reform in Turkey: sensitivity and quality comparisons. Int J Public Policy 10(4/5):178–194

Download references

Acknowledgments

This study was funded by the Scientific and Technological Research Council of Turkey with a project number of 110 K443. The authors retained control over the entire process during the production of the manuscript.

Conflict of interest

The authors declare that they have no conflict of interest in connection with this paper.

Author information

Authors and Affiliations

  1. Department of Health Management, Istanbul Medipol University, Istanbul, Turkey

    Hacer Özgen Narcı

  2. Department of Health Administration, Virginia Commonwealth University, Richmond, VA, USA

    Yasar A. Ozcan

  3. Department of Healthcare Management, Hacettepe University, Ankara, Turkey

    İsmet Şahin

  4. Department of Healthcare Management, Osmangazi University, Eskişehir, Turkey

    Menderes Tarcan

  5. Bahceli Sok. Berat Apt. No: 15/18, Sahrayıcedit-İstanbul, Turkey

    Mustafa Narcı

Authors
  1. Hacer Özgen Narcı
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Yasar A. Ozcan
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. İsmet Şahin
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. Menderes Tarcan
    View author publications

    You can also search for this author in PubMed Google Scholar

  5. Mustafa Narcı
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Hacer Özgen Narcı.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Özgen Narcı, H., Ozcan, Y., Şahin, İ. et al. An examination of competition and efficiency for hospital industry in Turkey. Health Care Manag Sci 18, 407–418 (2015). https://doi.org/10.1007/s10729-014-9315-x

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10729-014-9315-x

Keywords

MSC code

Search

Navigation