The efficiency of treatment strategies of general practitioners. A Malmquist index approach

It is widely recognized that general practitioners (GPs) play a key role in determining the use of resources for ambulatory care. In addition to the GPs' working hours, these resources consist of the work of specialists and that of hospital physicians treating the GPs' referrals and the cost of medication and other measures induced by the GP. Different systems of remuneration differ in their power to lead to efficient service provision. This contribution provides empirical evidence on the efficiency of service provision by Austrian GPs. The analysis is based on data for some 600 GPs. The data comprise sufficient information to assess the GPs' efficiency with regard to the way they manage their cases. Data Envelopment Analysis, a nonparametric technique, is used to estimate the production frontier. The results suggest that almost one-half of the GPs in the sample have a relative efficiency of 0.8 or less. A Malmquist decomposition of the productivity change reveals a decline in productivity. This is due to a pronounced negative shift of the frontier whereas individual efficiency rises against the weaker benchmark of the new frontier.