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A Comparative Application of Econometric Frontier and Dea Methods for Assessing Cost Efficiency of Finnish Hospitals

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Health, the Medical Profession, and Regulation

Part of the book series: Developments in Health Economics and Public Policy ((HEPP,volume 6))

Abstract

Economic recession and the government’s budget deficit are placing increasing pressure on hospitals in Finland to contain costs. The state subsidy reform in 1993 was expected to enhance productive efficiency by introducing competitive elements to health care. The reform allowed the municipalities to adopt a more active role as purchasers of hospital services as they became the budget holders of public health care money. Hospitals in Finland are owned by hospital districts, which are made up of federations of municipalities to which every municipality must belong. So far the role of hospital districts as local monopolies for producing specialised services has prevented the emergence of internal markets between the purchasers (municipalities) and the providers (Häkkinen 1995). Moreover, the purchaser cannot compare prices between hospitals because of the heterogeneity of the current pricing systems. However, purchasers, central government and tax-payers all began to express interest in the measurement of hospital efficiency after recent studies (Pekurinen et al. 1991, Kekomäki and Linna 1994, Linna and Häkkinen 1995) revealed that substantial differences could exist between hospitals in their productive efficiency.

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Authors
  1. Miika Linna
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  2. Unto Häkkinen
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Editor information

Editors and Affiliations

  1. Socioeconomic Institute, University of Zürich, Switzerland

    Peter Zweifel

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© 1998 Springer Science+Business Media New York

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Linna, M., Häkkinen, U. (1998). A Comparative Application of Econometric Frontier and Dea Methods for Assessing Cost Efficiency of Finnish Hospitals. In: Zweifel, P. (eds) Health, the Medical Profession, and Regulation. Developments in Health Economics and Public Policy, vol 6. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-5681-7_9

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  • DOI: https://doi.org/10.1007/978-1-4615-5681-7_9

  • Publisher Name: Springer, Boston, MA

  • Print ISBN: 978-1-4613-7601-9

  • Online ISBN: 978-1-4615-5681-7

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