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Please use this identifier to cite or link to this item: http://hdl.handle.net/10651/7597

Title: Reserve capacity of public and private hospitals in response to demand uncertainty
Author(s): Rodríguez Álvarez, Ana María
Roibás Alonso, David
Wall, Alan John
Keywords: Distance Function
Technical Efficiency
Demand Uncertainty
Issue date: 2011
Publisher version: http://dx.doi.org/10.1002/hec.1755
Citation: Health Economics, 21(7), p. 839-851 (2012); doi:10.1002/hec.1755
Abstract: A feature of hospitals is that they face uncertain demand for the services they offer. To cover fluctuations in demand, they need to maintain reserve service capacity in the form of beds, equipment, personnel, etc. to minimize the probability of excess queuing or turning away patients, creating a trade-off between reserve service capacity and economic costs. Using a simple theoretical framework, we show how the reserve capacity established depends on institutional characteristics that can affect the objective of the hospital. In particular, we show that private and public hospitals may provide different levels of reserve capacity. In an empirical application using a panel data set of Spanish hospitals over the period 1996–2006, we model reserve service capacity using a distance frontier approach. Our results show that private hospitals generally react to a lesser extent to demand uncertainty than public hospitals
URI: http://hdl.handle.net/10651/7597
ISSN: 1057-9230
Local identifier: 20110668
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