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Cost efficiency in primary care contracting: A stochastic frontier cost function approach

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Abstract
The principal aim of this paper is to estimate a stochastic frontier cost function and an inefficiency effects model in the analysis of the primary health care services purchased by the public authority and supplied by 180 providers in 1996 in Catalonia. The evidence from our sample does not support the premise that contracting out has helped improve purchasing cost efficiency in primary care. Inefficient purchasing cost was observed in the component of this purchasing cost explicitly included in the contract between purchaser and provider. There are no observable incentives for the contracted-out primary health care teams to minimise prescription costs, which are not explicitly included in the present contracting system.

Suggested Citation

  • Jaume Puig & Vicente Ortún, 2003. "Cost efficiency in primary care contracting: A stochastic frontier cost function approach," Economics Working Papers 719, Department of Economics and Business, Universitat Pompeu Fabra.
    • Handle: RePEc:upf:upfgen:719
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    Cited by:

    1. Rita Bastião & Nuno de Sousa Pereira, 2020. "Performance in the Delivery of Primary Health Care Services: A Longitudinal Analysis," CEF.UP Working Papers 2002, Universidade do Porto, Faculdade de Economia do Porto.
    2. William Griffiths & Xiaohui Zhang & Xueyan Zhao, 2010. "A Stochastic Frontier Model for Discrete Ordinal Outcomes: A Health Production Function," Department of Economics - Working Papers Series 1092, The University of Melbourne.
    3. Dino Rizzi & Michele Zanette, 2021. "Potential efficiency gains and expenditure savings in the Italian Regional Healthcare Systems," Politica economica, Società editrice il Mulino, issue 2, pages 187-214.
    4. Luis Murillo-Zamorano & Carmelo Petraglia, 2011. "Technical efficiency in primary health care: does quality matter?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 12(2), pages 115-125, April.
    5. Thanassoulis, Emmanuel & Silva Portela, Maria C.A. & Graveney, Mike, 2014. "Using DEA to estimate potential savings at GP units at medical specialty level," Socio-Economic Planning Sciences, Elsevier, vol. 48(1), pages 38-48.
    6. Gorgemans, Sophie & Urbina-Pérez, Olga, 2022. "New legal forms in health services: Evaluation of a Spanish public policy," Health Policy, Elsevier, vol. 126(8), pages 802-807.
    7. Rafael Mu-oz de Bustillo & José-Ignacio Antón, 2013. "Those were the days, my friend: The public sector and the economic crisis in Spain," Chapters, in: Daniel Vaughan-Whitehead (ed.), Public Sector Shock, chapter 13, pages 511-542, Edward Elgar Publishing.
    8. Stefan Felder & Harald Tauchmann, 2013. "Federal state differentials in the efficiency of health production in Germany: an artifact of spatial dependence?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 14(1), pages 21-39, February.
    9. William Griffiths & Xiaohui Zhang & Xueyan Zhao, 2014. "Estimation and efficiency measurement in stochastic production frontiers with ordinal outcomes," Journal of Productivity Analysis, Springer, vol. 42(1), pages 67-84, August.
    10. Thanassoulis, Emmanuel & Silva Portela, Maria C.A. & Graveney, Mike, 2012. "Estimating the scope for savings in referrals and drug prescription costs in the general Practice units of a UK primary care trust," European Journal of Operational Research, Elsevier, vol. 221(2), pages 432-444.
    11. Sørensen, Torben H. & Olsen, Kim R. & Gyrd-Hansen, Dorte, 2009. "Differences in general practice initiated expenditures across Danish local health authorities--A multilevel analysis," Health Policy, Elsevier, vol. 92(1), pages 35-42, September.
    12. Mònica Solanes-Cabús & Eugeni Paredes & Esther Limón & Josep Basora & Iris Alarcón & Irene Veganzones & Laura Conangla & Núria Casado & Yolanda Ortega & Jordi Mestres & Jordi Acezat & Joan Deniel & Jo, 2023. "Primary and Community Care Transformation in Post-COVID Era: Nationwide General Practitioner Survey," IJERPH, MDPI, vol. 20(2), pages 1-12, January.
    13. World Bank, 2009. "Serbia - Baseline Survey on Cost and Efficiency in Primary Health Care Centers Before Provider Payment Reforms," World Bank Publications - Reports 3036, The World Bank Group.
    14. Pedro Barros & Sara Machado, 2010. "Money for nothing?," Health Care Management Science, Springer, vol. 13(3), pages 234-255, September.

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    More about this item

    Keywords

    Primary health care; purchasing cost efficiency; frontier models;
    All these keywords.

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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