Ring fencing of elective surgery: does it affect hospital efficiency?

Area of Science:

• Health Services Research
• Hospital Management
• Operations Research

Background:

• Hospitals often operate parallel production lines for elective and emergency surgical procedures.
• The efficiency of separating these services, known as ring fencing (RF), is a subject of ongoing investigation.

Purpose of the Study:

• To evaluate the impact of ring fencing elective surgery on hospital efficiency.
• To determine the conditions under which RF may improve cost and technical efficiency.

Main Methods:

• An intensive three-month departmental-level study across three hospitals.
• A longitudinal panel data analysis of Norwegian hospitals (1992-2000) using fixed-effect regression models.

Main Results:

• The intensive study suggested potential benefits of RF for cost and technical efficiency under specific case-mix and demand conditions.
• Panel data analysis yielded unstable results, indicating RF does not universally improve hospital efficiency.

Conclusions:

• Ring fencing is not a guaranteed method for enhancing hospital efficiency.
• RF may serve as a valuable management tool to improve efficiency in particular contexts of case-mix and service demand.