Individual Hospital Evaluation with Stochastic

How do we asses and evaluate hospitals with stochastic frontier when there are ‘significant concerns’ in literature ? Then It can only be used for policy making. (MSY)

Analysis to U.S. Hospitals? What Have We Learned From the Application of Stochastic Frontier Michael D. Rosko and Ryan L. Mutter 

The literature has not focused on the use of SFA to assess individual hospital performance, and there are significant concerns about using SFA for that type of analysis (Newhouse, 1994; Street, 2003). While some of these concerns have been addressed (Rosko & Mutter, 2008), others remain, so SFA has primarily been used to examine the relative efficiency of groups of hospitals (Folland & Hofler, 2001).

 Newhouse, J. (1994). Frontier estimation: How useful a tool for health economics? Journal of Health Economics, 13, 317-322.
Street, A. (2003). How Much Confidence Should We Place in Efficiency Estimates? Health Economics, 12, 895-907.

Mutter, R., & Rosko, M. (2008). The impact of ownership on the cost-efficiency of U.S. hospitals.
In J. Blank & V. Valdmanis (Eds.), Evaluating hospital policy and performance: Contributions from hospital policy and productivity research (pp. 113-138). New York, NY: Elsevier.

 Folland, S., & Hofler, R. (2001). How reliable are hospital efficiency estimates? Exploiting the dual to homothetic production. Health Economics, 10, 683-698.


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