Hospital multifactor productivity: a presentation and analysis of two methodologies
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Published on: February 24, 2026
Jonathan D Cylus1, Bridget A Dickensheets
1Office of the Actuary (OACT), Centers for Medicare & Medicaid Services, Baltimore, MD 21244-1850, USA. Jonathan.Cylus@cms.hhs.gov
Abstract:
In response to recent discussions regarding the ability of hospitals to achieve gains in productivity, we present two methodologies that attempt to measure multifactor productivity (MFP) in the hospital sector. We analyze each method and conclude that the inconsistencies in their outcomes make it difficult to estimate a precise level of MFP that hospitals have historically achieved. Our goal in developing two methodologies is to inform the debate surrounding the ability of hospitals to achieve gains in MFP, as well as to highlight some of the challenges that exist in measuring hospital MFP.
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