Efficiency of physician specialist groups.

This is the first study to use stochastic frontier analysis to simultaneously estimate the technical, cost and profit efficiency of physician practices for different physician specialist groups. We base our analysis on a unique panel data set of 4964 physician practices in Germany for the years 2008 to 2010. The data contains information on practice costs and revenues, services provided, as well as physician characteristics and practice characteristics. Additionally we consider a wide range additional variables not previously analyzed in this context (e.g. sub-specialization of physician groups and environmental factors such as physician density in the area). We investigate differences in cost, technical and profit efficiency utilizing production-/cost- and profit-functions with a translog functional form. We estimated the stochastic frontier using the comprehensive one-step approach for panel data following Battese and Coelli (Empir Econ 20(2): 325-332, 10). Overall findings indicate that participation in disease management programs and the degree of specialization are associated with significantly higher technical- cost-, and profit-efficiency for most physician specialist groups, e.g. due to the standardization of processes. In addition, our analyses show that group practices perform significantly better than single practices. This may be due to indivisibilities in expensive technical equipment, which can lead to different health care services being provided by different practice types. A more thorough look at specialist groups suggests that it is important to investigate all efficiency types for different physician groups, as results may depend on the type of efficiency analyzed as well as the physician group in question.

Profit efficiency of physician practices: a stochastic frontier approach using panel data.

While determinants of efficiency have been the subject of a large number of studies in the inpatient sector, relatively little is known about factors influencing efficiency of physician practices in the outpatient sector. With our study, we provide the first paper to estimate physician practice profit efficiency and its' determinants. We base our analysis on a unique panel data set of 4964 physician practices for the years 2008 to 2010. The data contains information on practice costs and revenues, services provided, as well as physician and practice characteristics. We specify the profit function of the physician practice as a translog functional form. We estimated the stochastic frontier using the comprehensive one-step approach for panel data of Battese and Coelli (1995). For estimation of the profit function, we regressed yearly profit on several inputs, outputs and input/output price relationships, while we controlled for a range of control variables such as patients' case-mix or share of patients covered by statutory health insurance. We find that participation in disease management programs and the degree of physician practice specialization are associated with significantly higher profit efficiency. In addition, our analyses show that group practices perform significantly better than single practices.

Estimation of a physician practice cost function.

OBJECTIVE: The goal of the present paper is to provide evidence on the behavior of physician practice cost functions. DATA SOURCES: Our study is based on the data of 3686 physician practices in Germany for the years 2006 to 2008. STUDY DESIGN: We apply a translog functional form and include a comprehensive set of variables that have not been previously used in this context. A system of four equations using three-stage least squares is estimated. PRINCIPAL FINDINGS: We find that a higher degree of specialization leads to a decrease in costs, whereas quality certification increases costs. Costs of group practices are higher than of solo practices. The latter finding can be explained by the existence of indivisibilities of expensive technical equipment. Smaller practices do not reach the critical mass to invest in certain technologies, which leads to differences in the type of health care services provided by different practice types. CONCLUSIONS: This is the first study to use physician practices as the unit of observation and to consider the endogenous character of physician input. Our results suggest that identifying factors that influence physician practice costs is important for providing evidence-based physician payment systems and to enable decision-makers to set incentives effectively.

Comparison of Site of Death, Health Care Utilization, and Hospital Expenditures for Patients Dying With Cancer in 7 Developed Countries.

IMPORTANCE: Differences in utilization and costs of end-of-life care among developed countries are of considerable policy interest. OBJECTIVE: To compare site of death, health care utilization, and hospital expenditures in 7 countries: Belgium, Canada, England, Germany, the Netherlands, Norway, and the United States. DESIGN, SETTING, AND PARTICIPANTS: Retrospective cohort study using administrative and registry data from 2010. Participants were decedents older than 65 years who died with cancer. Secondary analyses included decedents of any age, decedents older than 65 years with lung cancer, and decedents older than 65 years in the United States and Germany from 2012. MAIN OUTCOMES AND MEASURES: Deaths in acute care hospitals, 3 inpatient measures (hospitalizations in acute care hospitals, admissions to intensive care units, and emergency department visits), 1 outpatient measure (chemotherapy episodes), and hospital expenditures paid by insurers (commercial or governmental) during the 180-day and 30-day periods before death. Expenditures were derived from country-specific methods for costing inpatient services. RESULTS: The United States (cohort of decedents aged >65 years, N = 211,816) and the Netherlands (N = 7216) had the lowest proportion of decedents die in acute care hospitals (22.2.% and 29.4%, respectively). A higher proportion of decedents died in acute care hospitals in Belgium (N = 21,054; 51.2%), Canada (N = 20,818; 52.1%), England (N = 97,099; 41.7%), Germany (N = 24,434; 38.3%), and Norway (N = 6636; 44.7%). In the last 180 days of life, 40.3% of US decedents had an intensive care unit admission compared with less than 18% in other reporting nations. In the last 180 days of life, mean per capita hospital expenditures were higher in Canada (US $21,840), Norway (US $19,783), and the United States (US $18,500), intermediate in Germany (US $16,221) and Belgium (US $15,699), and lower in the Netherlands (US $10,936) and England (US $9342). Secondary analyses showed similar results. CONCLUSIONS AND RELEVANCE: Among patients older than 65 years who died with cancer in 7 developed countries in 2010, end-of-life care was more hospital-centric in Belgium, Canada, England, Germany, and Norway than in the Netherlands or the United States. Hospital expenditures near the end of life were higher in the United States, Norway, and Canada, intermediate in Germany and Belgium, and lower in the Netherlands and England. However, intensive care unit admissions were more than twice as common in the United States as in other countries.

Cost and technical efficiency of physician practices: a stochastic frontier approach using panel data.

This is the first study to use stochastic frontier analysis to estimate both the technical and cost efficiency of physician practices. The analysis is based on panel data from 3,126 physician practices for the years 2006 through 2008. We specified the technical and cost frontiers as translog function, using the one-step approach of Battese and Coelli to detect factors that influence the efficiency of general practitioners and specialists. Variables that were not analyzed previously in this context (e.g., the degree of practice specialization) and a range of control variables such as a patients' case-mix were included in the estimation. Our results suggest that it is important to investigate both technical and cost efficiency, as results may depend on the type of efficiency analyzed. For example, the technical efficiency of group practices was significantly higher than that of solo practices, whereas the results for cost efficiency differed. This may be due to indivisibilities in expensive technical equipment, which can lead to different types of health care services being provided by different practice types (i.e., with group practices using more expensive inputs, leading to higher costs per case despite these practices being technically more efficient). Other practice characteristics such as participation in disease management programs show the same impact throughout both cost and technical efficiency: participation in disease management programs led to an increase in both, technical and cost efficiency, and may also have had positive effects on the quality of care. Future studies should take quality-related issues into account.