Effects of ownership, subsidization and teaching activities on hospital costs in Switzerland

This paper explores the cost structure of Swiss hospitals, focusing on differences due to teaching activities and those across different ownership and subsidization types. A stochastic total cost frontier with a Cobb-Douglas functional form has been estimated for a panel of 150 general hospitals over the six-year period from 1998 and 2003. Inpatient cases adjusted by DRG cost weights and ambulatory revenues are considered as two separate outputs. The adopted econometric specification allows for unobserved heterogeneity across hospitals. The results indicate that the time-invariant unobserved factors could account for considerable cost differences that could be only partly due to inefficiency. The results suggest that teaching activities are an important cost driving factor and hospitals that have a broader range of specialization are relatively more costly. The excess costs of university hospitals can be explained by more extensive teaching activities as well as the relatively high quality of medical units. However, even after controlling for such differences university hospitals have shown a relatively low cost-efficiency especially in the first two or three years of the sample period. The analysis does not provide any evidence of significant efficiency differences across ownership and subsidization categories.general hospitals, teaching hospitals, stochastic frontier, cost efficiency

Economies of scale and efficiency measurement in Switzerland's Nursing homes

This paper examines the cost efficiency in the nursing home industry, an issue of concern to Swiss policy makers because of the explosive growth of national expenditure on elderly care and the aging of the population. A stochastic cost frontier model with a translog function has been applied to a balanced panel data of 1780 observations from 356 nursing homes operating over five years (1998-2002) in Switzerland. We compare the estimation results from different panel data econometric techniques focusing on the various methods of specification of unobserved heterogeneity across firms. In particular, the potential effects of such unobserved factors on the estimation results and their interpretation have been discussed. The paper eventually addresses three empirical issues: (1) the measurement of economies of scale in the nursing home sector, (2) the assessment of the economic performance of the firms by estimating their cost efficiency scores, and (3) the role of unobserved heterogeneity in the estimation process. The findings suggest that the economies of scale are an important potential source of cost reduction in a majority of Swiss nursing homes. Taking the size as given the efficiency performance of most individual units is practically very close to the estimated best practice. Nevertheless, the efficiency estimates suggest that some of the nursing homes can significantly reduce their costs by improving their operations.COST EFFICIENCY, ECONOMIES OF SCALE, NURSING HOMES, STOCHASTIC FRONTIER, PANEL DATA

Analysis of lifetimes of building elements in the literature and in renovation practices and sensitivity analysis on building LCA & LCC

In this study, the service lives of the building elements, an important parameter in renovations and LCA/LCC calculations, are analyzed, based on a comprehensive literature review and a survey of Swiss households. The literature review showed that there is no consensus about the service lives, among the different countries, while the results of the survey on the renovation timing of the building elements, showed on average an agreement between the element’s effective lifetime and the average from the literature data. In addition, based on the literature data, lognormal distributions were defined for the service life of the building elements and then the probabilistic LCA & LCC were calculated. The results showed that the uncertainty of 6 building elements’ service lives can significantly influence the reliability of the results. For the practitioners, the study confirms that the current practice of using service life data of the SIA 2032 technical books, for building LCA and LCC, constitutes a relative good estimation of the most probable value of the probabilistic LCA