Letters to the Editor

The impact of accelerating electronic prescribing on hospitals' productivity levels: can health information technology bend the curve?

This paper examines how different strategies for implementing computerized prescriber order entry (CPOE) impact hospitals' productivity. We used the American Hospital Association's Annual Survey to construct hospital-level measures for 1,812 facilities and analyzed the productivity indices against CPOE use rates. The relationship between CPOE use rates and indices for "technical efficiency change" and "total factor productivity" was significant. Hospitals introducing CPOE facilitywide in a one-year period (where usage went from zero to more than 50%) experienced declines in both productivity indices. One implication is that hospitals achieving the goals of the "meaningful use" program promoted by the Centers for Medicare and Medicaid Services may do so at the expense of productivity.

Hospital inefficiency: what is the impact of membership in different types of systems?

The primary objective of this study is to assess whether systematic differences in inefficiency are associated with hospital membership in different types of systems. We employed the Battese/Coelli simultaneous stochastic frontier analysis (SFA) technique to estimate hospital cost inefficiency. Mean estimated inefficiency was 8.42%. Membership in different types of systems was related to estimated cost inefficiency (p < .05). Compared to hospitals that were members of centralized health systems, membership in centralized physician/insurance or decentralized systems was associated with decreased inefficiency; membership in independent systems was associated with increased inefficiency.

Stochastic frontier analysis of hospital inefficiency: a review of empirical issues and an assessment of robustness

Twenty stochastic frontier analysis (SFA) studies of hospital inefficiency in the United States were analyzed. Results from best-practice methods were compared against previously used methods in hospital studies to ascertain the robustness of SFA in estimating cost inefficiency. To compare past studies and analyze new data, SFA methods were varied by (a) the assumptions of the structure of costs and distribution of the error term, (b) inclusion of quality and product descriptor measures, and (c) use of simultaneous and two-stage estimation techniques. SFA results were relatively insensitive to several model variations.