Conference Publication Details
Mandatory Fields
Dineen, D; Ni Luasa, S; Zieba, M
2nd ATHEA - Conference for Health Economics "Efficiency and equality in health systems"
The Determinants of Efficiency in Nursing Home Care Provision in Ireland – A Double Bootstrap DEA Approach
2016
February
Unpublished
1
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Optional Fields
Long-term care Technical and scale efficiency DEA Two-stage double bootstrap Public versus private Ireland
Institute for Advanced Studies, Vienna
26-FEB-16

Applying a conventional Data Envelopment Analysis (DEA) and the homogeneous bootstrap procedure, we found that the efficiency levels for both public and private nursing homes in Ireland do not exceed 50 per cent on average – a finding which corroborates results obtained for the nursing home sector in other countries.  Furthermore, given the observed very low efficiency scores, this paper aims to estimate the relationship between efficiency and its possible determinants.  We use a comprehensive set of environmental variables in 59 public and 93 private Irish nursing homes for the period 2008-2009.  As well as ownership and other characteristics such as size, age, regulatory constraints and business environment, we examine how the quality of care and the case mix affect the efficiency scores of the nursing homes in Ireland.  Many previous studies have employed a two-stage approach wherein nonparametric DEA efficiency estimates from the first stage are regressed on a vector of some environmental variables in a parametric analysis which most often specified a censored (Tobit) model for the second stage.  The typical two-stage studies do not provide a coherent description of the underlying data-generating process (DGP), and the method of inference is flawed since the DEA efficiency estimates are biased and are serially correlated.  Whatever the second-stage regression specification employed, conventional inference methods fail to give valid inference due to the fact that in the second-stage, true efficiency remains unobserved and must be replaced with DEA estimates of efficiency, and these are correlated by construction.  The efficiency score is a point estimate without a probability distribution around it as required by the Tobit methodology or any other parametric regression technique.  Using the DEA point estimates in a second stage analysis may cause biased and inconsistent estimates of the parameters of the environmental variables.  We apply a double bootstrap DEA approach in order to obtain unbiased and consistent results.  We show that ownership does not have a significant effect on technical efficiency, but the size of the nursing home has a positive influence.  More importantly, the quality of care and the case-mix are important factors determining efficiency scores in Irish nursing homes.  In terms of policy implications, our results suggest that whereas quality, as indicated by the proportion of single beds, decreases technical efficiency, appropriate training for medical staff such as a diploma in gerontology should be incentivised.

Department of Economics, KBS
Grant Details