Journal of Productivity Analysis

, Volume 21, Issue 2, pp 183–199 | Cite as

Measuring Hospital Performance in the Presence of Quasi-Fixed Inputs: An Analysis of Québec Hospitals

  • Daniel Bilodeau
  • Pierre-Yves Crémieux
  • Brigitte Jaumard
  • Pierre Ouellette
  • Tsévi Vovor


This research proposes an approach to measure hospital performance based on a generalization of Banker and Morey (1986) and Førsund (1996). This approach considers quasi-fixed inputs explicitly, calculates their implicit cost, and quantifies returns to scale. The performance measure is decomposed into allocative and technical inefficiencies. Based on a very complete data set of Québec hospitals, we find that significant inefficiencies of up to 17% ($700 CAN million) could have been saved through improved performance. Postestimation analyses that include qualitative measures of care suggest that differences in performance are attributable to differences in management or unobservable quality of care rather than patient case mix.

hospital performance returns to scale implicit price quasi-fixed inputs allocative inefficiencies technical inefficiencies 


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Copyright information

© Kluwer Academic Publishers 2004

Authors and Affiliations

  • Daniel Bilodeau
    • 1
  • Pierre-Yves Crémieux
    • 1
    • 2
  • Brigitte Jaumard
  • Pierre Ouellette
    • 1
  • Tsévi Vovor
  1. 1.Département des sciences économiquesUniversité du Québec à MontréalMontréalCanada
  2. 2.Analysis GroupBostonUSA

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