Has the DRG System Influenced the Efficiency of Diagnostic Technology in Portugal?

The use of Diagnostic Related Groups (DRG) as a mechanism for hospital financing is a currently debated topic in Portugal. The DRG system was scheduled to be initiated by the Health Ministry of Portugal on January 1, 1990 as an instrument for the allocation of public hospital budgets funded by the National Health Service (NHS), and as a method of payment for other third party payers (ex. Public Employees (ADSE), private insurers, etc.). Based on experience from other countries such as the United States, it was expected that implementation of this system would result in more efficient hospital resource utilisation and a more equitable distribution of hospital budgets. However, in order to minimise the potentially adverse financial impact on hospitals, the Portuguese Health Ministry decided to gradually phase in the use of the DRG system for budget allocation by using blended hospital-specific and national DRG case-mix rates. Since implementation in 1990, the percentage of each hospital's budget based on hospital specific costs was to decrease, while the percentage based on DRG case-mix was to increase. This was scheduled to continue until 1995 when the plan called for allocating yearly budgets on a 50% national and 50% hospital-specific cost basis. While all other non- NHS third party payers are currently paying based on DRGs, the adoption of DRG case-mix as a National Health Service budget setting tool has been slower than anticipated. There is now some argument in both the political and academic communities as to the appropriateness of DRGs as a budget setting criterion as well as to their impact on hospital efficiency in Portugal. This paper uses a two-stage procedure to assess the impact of actual DRG payment on the productivity (through its components, i.e. technological change and technical efficiency change) of diagnostic technology in Portuguese hospitals during the years 1992-1994, using both parametric and non-parametric frontier models. We find evidence that the DRG payment system does appear to have had a positive impact on productivity and technical efficiency of some commonly employed diagnostic technologies in Portugal during this time span.

Health, Capabilities and Functionings: An Empirical Analysis for the UK

We analyse the relationship between socio-economic variables and health outcomes for adult participants in three waves of the British Household Panel Survey from 1999 to 2001. We adopt Sen’s capability approach and compute a capability index ranking individuals on the basis of their ability to transform health and economic resources into health functionings. The results show that, even when controlling for access to health resources, socio-economic variables affect significantly the health functionings in the UK. This suggests the need for more equalitarian access policies to health care facilities.Health; Capability Approach; Production Frontier

PATTERNS OF CORPORATE GOVERNANCE AND TECHNICAL EFFICIENCY IN ITALIAN MANUFACTURING.

The purpose of this paper is to analyse the relationship between the corporate governance system and technical efficiency in Italian manufacturing. We use a non-parametric frontier technique (DEA) to derive technical efficiency measures for a sample of Italian firms taken from 9 manufacturing industries. These measures are then related to the characteristics of the corporate governance system. Two of these characteristics turn out to have a positive impact on technical efficiency: the percentage of the company shares owned by the largest shareholder and the fact that a firm belongs to a pyramidal group. Interestingly, a trade-off emerges between these influences, in the sense that one is stronger in industries where the other is weaker.

Technical efficiency change and finance constraints: an empirical analysis for the Italian manufacturing, 1989-1994

The purpose of this paper is to test whether finance constraints create an incentive for debt-constrained firms to improve efficiency along time, using a sample of 1124 firms from the Italian manufac- turing over the period 1989-1994. Technical efficiency change indices are derived using a new approach based on the estimation of distance parametric frontiers. These are then regressed on measures of fin- ance constraints to analyze their impact on firms' efficiency growth. The results support the hypothesis that technical efficiency change is affected by the external resources availability; more precisely, once a firm is subject to finance constraints, it has an incentive to improve its technical efficiency over time to guarantee positive profits and gains in productivity.

Governance Regimes, Corruption and Growth: Theory and Evidence

We study the role of governance regimes in the determination of corruption and economic growth. Our model identifies two governance regimes and shows that the relationship between corruption and growth is regime specific. We use a threshold model to estimate the impact of corruption on growth and allow corruption to be endogenous. We identify two governance regimes, conditional on the quality of political institutions. In the regime with high quality political institutions, corruption has a negative impact on growth. In the regime with low quality institutions, corruption has little impact on growth.Growth; corruption; threshold models; governance.

Profit-sharing, Technical Efficiency Change and Finance Constraints

This paper analyses the mechanisms through which profit-sharing schemes may induce debt constrained firms to improve technical efficiency over time to guarantee positive profits. This hypothesis is first formalised in a partial equilibrium framework and then is tested on a sample of Italian traditional and cooperative firms. Technical efficiency change indexes are computed by DEA. These are regressed on a measure of finance constraints to analyse their impact on firms' efficiency growth. The results support the hypothesis that a restriction in the availability of financial resources can affect positively the growth in efficiency in firms with profit-sharing schemes.Finance Constraints, Technical Efficiency and Profit Sharing

Spillover effects of investment in big data analytics in B2B relationships:What is the role of human capital?

Economy-wide investment in Big Data Analytics (BDA) offers retailers a number of opportunities and while there is some evidence that new technologies have been widely adopted by retailers, it also transpires that many retailers have yet to fully exploit the benefits of BDA. Most research on Big Data and productivity (or performance) tends to focus on internal factors that prevent retailers from fully exploiting their investment in BDA. Research has paid scarce attention to the benefits that can accrue to the focal firm from the upstream investment in BDA and the features of the B2B marketing environment that may hamper (or enhance) these benefits. Unlike the previous literature, the paper tests the extent to which retailers, by having access to larger share of graduate workforce at regionally, can benefit more from inter-industry upstream investment in BDA than retailers located in areas where such workforce is scarce. Using data from ORBIS, KLEMS and QLFS, we show that retailers located in regions with a larger proportion of graduate workforce benefit more from inter-industry upstream investment in BDA as they tend to be more efficient on average. Equally, upstream investment in BDA is positively associated to frontier shifts over time (i.e. technical progress)

The frontier approach to the measurement of productivity and technical efficiency

In 1957, Farrell proposed to measure technical (in)efficiency as the realised deviation from a frontier isoquant. Since then, the research has developed several methods to derive the production frontier and it has also extended its scope in applying frontier techniques to the measurement of total factor productivity. In this paper, I present the core techniques for the measurement of technical efficiency and productivity based on the notion of frontier and introduce the more recent technological advances in the field