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Published on: March 27, 2018
Competition and efficiency in the end stage renal disease program
Journal of Health Economics
|July 10, 1983
Summary
Dialysis facility costs are biased by competitive amenity bias, making efficiency hard to measure. Higher reimbursement increases costs, amenities, and patient well-being, requiring policy decisions on amenity levels.
Area of Science:
- Health economics
- Healthcare management
Background:
- Medical service cost functions can suffer from 'competitive amenity bias'.
- This bias can hinder the identification of factors influencing economic efficiency in healthcare provision.
Purpose of the Study:
- To investigate the productivity and potential biases in dialysis facilities.
- To understand the relationship between reimbursement levels, costs, amenities, and patient well-being.
Main Methods:
- Analysis of production or cost functions in dialysis facilities.
- Qualitative investigation of factors affecting economic efficiency and amenity provision.
Main Results:
- Evidence of 'competitive amenity bias' was found in dialysis facilities.
- Difficulty in accurately estimating cost functions due to this bias.
- Reimbursement levels positively correlate with incurred costs, amenity levels, and patient well-being in competitive markets.
Conclusions:
- Policy decisions are needed to determine optimal reimbursement levels.
- Societal preferences for amenity delivery to public program beneficiaries must be considered.
- Balancing cost, amenity, and patient well-being is crucial in healthcare policy.
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