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Web End = Eur J Health Econ (2015) 16:459469 DOI 10.1007/s10198-014-0584-6
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Web End = Analysis of the cost and efciency relationship: experience in the Turkish pay for performance system
Mehmet Sahin Gok Erkut Altndag
Received: 11 April 2013 / Accepted: 24 March 2014 / Published online: 11 April 2014 Springer-Verlag Berlin Heidelberg 2014
Abstract This paper analyzes the effects of the pay for performance (PFP) system on the efciencies of public and private hospitals in Turkey. In order to evaluate these effects, we examine the relationship between hospital efciency and health care costs in Turkey, and address the impact of the PFP system on the efciencies of public and private hospitals. In an effort to analyze the efciencies of public and private hospitals, this study uses data envelopment analysis. The Malmquist Productivity Index is also used to analyze the patterns of efciency change for the study years from 2001 to 2008. This study shows that health care costs and hospital efciency are negatively correlated for private hospitals, while they are positively correlated for public hospitals. In other words, increased health care costs might reduce efciency in private hospitals in contrast to public hospitals. Our ndings also indicate that average efciencies of public hospitals tend to increase, particularly during the implementation period of PFP system. The efciency trend of private hospitals, conversely, decreased in the latter periods of the PFP system. Suggestions for improvement are provided to the health care policy makers regarding the impact of health care reforms on public and private hospitals.
Keywords Hospital efciency Health care costs Data
envelopment analysis Public and private hospitals Pay
for performance system
JEL Classication C14 C23 D24 I15 I18
Introduction
The growing trends of health care costs have forced governments and health care policy makers to become more concerned with health care productivity, efciency, and inefciency causes. Although health care providers inevitably focus on these issues, the inefcient utilization of health care resources still remains the main reason for increased spending on health care services [1]. In this regard, health...