Activity‐based funding reform and the performance of public hospitals: The case of Queensland, Australia

Author:

Nguyen Bao Hoang1ORCID,Grosskopf Shawna2,Yong Jongsay3,Zelenyuk Valentin4

Affiliation:

1. Centre for the Business and Economics of Health The University of Queensland Brisbane Queensland Australia

2. Economics School of Public Policy Oregon State University Corvallis Oregon USA

3. Melbourne Institute of Applied Economic and Social Research The University of Melbourne Parkville Victoria Australia

4. School of Economics and Centre for Efficiency and Productivity Analysis The University of Queensland Brisbane Queensland Australia

Abstract

AbstractThis study investigates the impact of activity‐based funding (ABF) on the performance of hospitals by exploiting a natural experiment that happened in the state of Queensland, Australia. To examine the outcome of the reform, the performance of hospitals is measured by the technical efficiency estimated from data envelopment analysis (DEA) models. We try to identify the causal effect of ABF on the technical efficiency of hospitals by incorporating difference‐in‐differences approach in the popular two‐stage DEA framework. We find empirical evidence that ABF improves the technical efficiency of hospitals.

Funder

Australian Research Council

National Health and Medical Research Council

Publisher

Wiley

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