Efficiency analysis of emergency departments in metropolitan areas

The demand in the healthcare industry is increasing exponentially due to aging population of the world and this is leading to a rapid increase in the cost of healthcare. The emergency departments of the hospitals are the frontline of health care systems and play an additional critical role in providing an efficient and high-quality response for patients. The overcrowding at the emergency departments due to growing demand results in a situation where the demand for ED services exceeds the ability to provide care in a reasonable amount of time. This has led countries to reconsider their health policies in a way to increase their efficiency in their healthcare systems in general and in emergency departments, in particular. As in many countries, there has been a steady and significant increase in the number of patients that seek health services at the emergency departments of state hospitals of Turkey, due to the significant structural reforms in health services since 2003. While meeting this increasing demand, it is ever more important to provide these critical health services efficiently. Therefore, the efficiency of the emergency departments of seven general hospitals run by Istanbul's Beyoglu State Hospitals Association have been analyzed using categorical Data Envelopment Analysis (DEA) models. The analysis of DEA results is supported by a set of statistical methods to make it easier for the hospital administrators to interpret the analysis and draw conclusions. The analysis shows that less-equipped EDs are supported by better equipped, larger EDs, resulting in a hub-and-spoke type of structure among the EDs where “satellite” EDs serve an important referral function and thus evaluating their efficiency without taking the interoperability among these units into account would not be an accurate assessment of their performance.     

Hospital performance standards and medical pricing: The impact of information disclosure in cardiac care

A policy concern is that the initiation of Hospital Compare (HC) reporting in Medicare provided leverage to insurers in price negotiations for lowering private sector prices without regard to hospital performance. Using the sequential Nash bargaining framework we provide economic intuition to the contrary: while average hospital prices decline under quality disclosures, hospitals with above‐average quality are able to exert a stronger bargaining position, consequently capturing prices above the market rate. To explore this issue empirically we estimate variants of difference‐in‐difference models, examining the effects of the three main scores (heart attack, heart failure, and combined mortalities) on transaction prices of related hospital procedures. States which had similar mandated reporting systems in place before the initiation of HC form the control group. Analyzing claims data of privately insured patients, we find that HC exerted downward pressure on prices. However, hospitals rated “above‐average” captured higher prices, thereby offsetting the overall policy effect fully or partially. Leads and lags analysis lends further support for our difference‐in‐difference approach. We find that highly ranked hospitals received a quality premium of 8–14%, comparable to price effects found in other health care markets. We conclude that HC was effective at constraining prices without penalizing high performers.     

Performance evaluation and prediction of the integrated circuit industry in China: A hybrid method

Since the “ZTE ban”, the development of the integrated circuit (IC) industry has attracted wide attention, especially in China. The performance evaluation and prediction of the IC industry is of great significance for promoting the development of this industry. In this paper, a hybrid method is proposed to study the performance of the IC industry from the perspectives of evaluation and prediction, which is unique as it evaluates the performance at past, current and future terms simultaneously. Firstly, a dynamic data envelopment analysis model is used to explore the performances of the IC industry between China and the United States from 2008 to 2017. Furthermore, in order to figure out the main sources of the inefficiency, the projection analysis is implemented based on the performance scores. Then, the grey model GM(1, 1) is employed to predicted the performance of China's IC industry from 2018 to 2022, so as to point out the progressive direction for the future development of the industry. The empirical results show that: (1) as far as performance is concerned, there is a significant gap between China and the United States in the IC industry during 2008–2017, among which the most obvious gap is occurring in “IC packaging & testing”, followed by “IC design” and “wafer fabrication”; (2) the primary cause of the low performance in China's IC industry is the redundancy of the inputs, especially in “IC packaging & testing”, and the redundancy problem of labour investment is found to be the most serious; (3) according to the predicted results, the IC industry in China will steadily increase in terms of the performance scores in general, and the performance improvement of “IC packaging & testing” is relatively obvious, while the other two categories have a slight range of growth. Finally, the policy implications of improving the performance of the IC industry are put forward.     

An aggregative resource allocation model for hospital administration

One of the most pressing social problems in the United States today is the delivery of adequate health care services to every American. Despite the phenomenal rate of increase in hospital costs, the quality and depth of hospital service have been far from satisfactory. Yet, systematic analysis of hospital administration has been generally neglected by decision scientists, hospital administrators, and economists. This paper presents a methodology for an aggregative resource allocation in hospital administration. More specifically, it applies goal programming to design a general model and demonstrates its practical application for an optimum resource allocation in hospital administration through an empirical study.     

Going green,going clean: Lean‐green sustainability strategy and firm growth

Despite the widespread recognition of the paybacks of “going green” and “going clean,” limited research has focused on the impact of lean‐green strategy on firm growth. In this study, we contribute to strategy and environmental sustainability literatures by investigating the possibility that the influence on lean‐green strategy and firm growth is driven by different levels of industry competition, managerial power, and family ties. Using panel data from 732 firms in four major industrialized economies (the United States, Germany, France, and the United Kingdom), we found that lean‐green strategy positively relates to firm growth and this relationship is amplified at higher levels of competition, managerial power, and family ties. Theoretical and practical implications of the study are also discussed.     

Industry Shock Expectations,Interindustry Linkages,and Merger Waves: Evidence from the Hospital Industry

It is well known that mergers often occur in waves, and this paper develops a new mechanism for merger waves: expectations over industry shocks. We develop a simple test of this explanation and use it to explore the role of expectations in the context of the 1990s hospital merger wave. Managed care such as Health Maintenance Organizations (HMOs) started to become popular in the late 1980s and ultimately became an important player in the health insurance market. Our empirical analysis shows that the expected increase in the popularity of HMOs was partly responsible for the hospital merger wave of the 1990s: hospitals feared that the “innovation” of managed care in the downstream insurance market would penetrate the upstream hospital market and responded to this belief by merging. Our results show the importance of incorporating expectations and interindustry linkages into the understanding of merger waves.     

How to Regulate Heterogeneous Hospitals?

In many areas of health care financing, there is controversy over the sources of cost variability and about the respective roles of inefficiency versus legitimate heterogeneity. This paper proposes a payment system that creates incentives to increase hospital efficiency when hospitals are heterogeneous, without reducing the quality of care. We consider an extension of Shleifer's yardstick competition model and apply an econometric approach to identify and evaluate observable and unobservable sources of cost heterogeneity. Moral hazard can be seen as the result of two components: long‐term moral hazard (hospital management can be permanently inefficient) and transitory moral hazard. The latter is linked to the manager's transitory cost‐reducing effort. For instance, he or she can be more or less rigorous each year when bargaining prices for supplies delivered to the hospital by outside firms. The use of a three‐dimensional nested database makes it possible to identify transitory moral hazard and to estimate its effect on hospital cost variability. Econometric estimates are performed on a sample of 7,314 stays for acute myocardial infarction observed in 36 French public hospitals over the period 1994–1997. We obtain two alternative payment systems. The first takes all unobservable hospital heterogeneity into account, provided that it is time invariant, whereas the second ignores unobservable heterogeneity. Simulations show that substantial budget savings—at least 20%—can be expected from the implementation of such payment rules. The first method of payment has the great advantage of reimbursing high‐quality care. It leads to substantial potential savings because it provides incentives to reduce costs linked to transitory moral hazard, whose influence on cost variability is far from negligible. This payment rule could be extended to other areas of health care financing, such as Adjusted Average Per Capita Cost to calculate Medicare Managed Care reimbursements in the United States.     

Intermediate input sharing in the hospital service industry

This paper addresses two related questions that help to explain geographic variation in access to medical services. The first question examines the existence of agglomeration economies in the hospital service industry. The second considers whether the sharing of intermediate inputs contributes to spillovers from spatial concentration of hospital services. These questions are addressed by estimating a bivariate probit model that explicitly controls for potential correlations between whether a service is provided and how the service is provided. Three key findings are obtained. First, hospitals in more concentrated areas are more likely to outsource intermediate services to specialized intermediate service suppliers. This suggests that agglomeration economies exist in the hospital service industry and are generated in part through the sharing of intermediate inputs. Second, the presence of nearby small hospitals increases the tendency to outsource, which is consistent with a “Chinitz” effect identified elsewhere in the literature. Third, the agglomeration effect attenuates geographically.     

Corporate Power and Expansive U.S. Military Policy

Military defense is generally treated in economics texts as a “public good” because the benefits are presumed to be shared by all citizens. However, defense spending by the United States cannot legitimately be classified as a public good, since the primary purpose of those expenditures has been to project power in support of private business interests. Throughout the course of the 20^th century, U.S. military spending has been largely devoted to protecting the overseas assets of multinational corporations that are based in the United States or allied nations. Companies extracting oil, mineral ores, timber, and other raw materials are the primary beneficiaries. The U.S. military provides its services by supporting compliant political leaders in developing countries and by punishing or deposing regimes that threaten the interests of U.S.‐based corporations. The companies involved in this process generally have invested only a small amount of their own capital. Instead, the value of their overseas assets largely derives from the appreciation of oil and other raw materials in situ. Companies bought resource‐rich lands cheaply, as early as the 1930s or 1940s, and then waited for decades to develop them. In order to make a profit on this long‐range strategy, they formed cartels to limit global supply and relied on the U.S. military to help them maintain secure title over a period of decades. Those operations have required suppressing democratic impulses in dozens of nations. The global “sprawl” of extractive companies has been the catalyst of U.S. foreign policy for the past century. The U.S. Department of Defense provides a giant subsidy to companies operating overseas, and the cost is borne by the taxpayers of the United States, not by the corporate beneficiaries. Defining military spending as a “public good” has been a mistake with global ramifications, leading to patriotic support for imperialist behavior.     

Inequality and ability

This paper examines how much the increasing “residual inequality” in the United States can be explained by increasing returns to cognitive skills. Also, this paper uses selection-correction techniques to estimate the latent population distribution of unobservable skill within three occupational sectors, and breaks down the leftover “residual” term into a “general” unobservable component and a sector-specific unobservable component. The results indicate that sector-specific skills have played only a minor role in the inequality trends. Increasing “residual inequality” is mostly characterized by an increasing importance of general skills, either IQ or the general unobservable skill, within all three occupations.     

Health Care

A bstract . A broad rational national health care insurance policy for the United States , providing for universal financial access to health care for all citizens, has both "meaning" and "validity" in that it would address actual socioeconomic concerns and could be implemented. It is justified by theories of justice of Rawls and Donaldson as well as by Adam Smith's socioeconomic model. Social consensus in this area accepts the principle of solidarity that individual self-interests may be better served through collective action , especially if such action is tied to competitive rules. Health care, therefore, is evolving as a public or quasi public good. The basic question no longer is whether the U.S. should have universal health care insurance but what specific health care policy the country should adopt in order to strengthen the market system and to maximize social welfare as effectively as possible.     

Why do some hospital leaders “speak no evil” about their organizations' medical errors?

Sentinel events, preventable medical errors resulting in serious disability or death, are a significant problem for hospital leaders. Accreditation agencies, such as the Joint Commission, urge hospitals to voluntarily disclose information about medical errors. However, some healthcare leaders “speak no evil” by choosing not to release sentinel‐event data. In an effort to increase the reporting of medical errors, several states passed laws mandating disclosure of sentinel events to the government. The state‐reported medical error rates of Indiana hospitals were compared with their leaders' perceptions of quality of care. Regardless of the number of sentinel events occurring at their hospitals, leaders consistently claimed their organizations provided high‐quality care. Two theories, rationalization and gaming, are presented to explain why leaders do not acknowledge the presence of serious quality‐management problems in their organizations.     

Efficiency of U.S. hospitals between 2001 and 2011

This study focuses on finding the trend of efficiency in the healthcare industry in recent years. We applied stochastic frontier analysis and data envelopment analysis methods to capture the efficiency of 1,471 hospitals and found a sign of the Baumol effect, which is detected by the decreasing trend of hospital efficiency with increasing trend of labor costs. Furthermore, we compared the results of both approaches (stochastic frontier and data envelope analyses) in capturing efficiency scores and suggest the U‐shaped curve of the size effect may indicate the practice of “cream skimming” by some small hospitals.     

Just-in-time and stockless programs for hospitals: fad or trend?

The JIT and stockless approach to provider-supplier relationships has proven to be a win-win proposition for the partners that have implemented it in many manufacturing industries and health care organizations as well. This strategy will fundamentally impact the entire cost structure within the hospital supply distribution chain. rewards have proven attainable and more comprehensive than had been hoped in the health care applications. The sweeping changes the health care industry experienced during the 1980s are leading creative materiel managers to seize the initiative to improve the current operating costs of their hospitals. They do not want to be left behind "holding the inventory."     

Health care: a leader or a follower? Reducing disposable waste

We clearly have the means to examine and reduce the amounts and types of disposable medical waste that health care institutions are creating. Although there may be special circumstances that prevent specific hospitals, or specific departments within a hospital, from converting to alternative products, much improvement can still be made. There are several strong examples of hospitals across the United States with programs that have drastically cut the amount of waste they are generating. They have eliminated disposable cups and eating utensils from the cafeterias, shifted to reusable underpads and surgical linens, and established recycling programs for paper and cardboard. These few cases are not enough. We cannot be lulled into believing that these exceptional efforts on the part of a few institutions are all that is needed. We should remember that if Mother Nature had intended for us to pat ourselves on the back, our hinges would be different. What is needed is a clear statement from the health care industry of its responsibility to society with regard to managing its waste. Leadership begins with action. If the health care industry does not take steps to regulate its disposable waste, the government undoubtedly will. We do not need to wait for our supervisors or administrators to fashion credos for us. All staff members know there are numerous ways that they can affect the amount of waste produced at their hospitals. They can also begin to affect the attitudes of those working around them. The consequences of inaction are simply too great. As fictional as half-empty grocery stores may have sounded at the beginning of this article, the problems that we face with waste disposal are certainly as grim. If we wait for our state and federal governments to solve the problems, it may be too late; and if it is too late, the solutions that they develop will certainly be extreme. We have the technology and the ability to cut dramatically the amount of disposable waste that health care generates. In practically every case, the lower-waste options also save the institution money. It is time that we honestly challenged our need for today's convenience at the expense of tomorrow's quality of life.     

Vertical Integration and Exclusive Behavior of Insurers and Hospitals

We examine vertical integration and exclusive behavior in health care markets in which insurers and hospitals bilaterally bargain over contracts. We employ a bargaining model of two hospitals and two health insurers competing on premiums. We show that asymmetric equilibria exist in which one insurer contracts one hospital whereas the other insurer contracts both hospitals, even if all players are equally efficient in their production. Asymmetric equilibria arise if hospitals are sufficiently differentiated. In these cases, total industry profits increase and consumer welfare decreases in comparison to the case in which both insurers have contracts with both hospitals. Vertical integration makes these equilibria possible for a wider range of parameters.     

Driving the electric bandwagon: The dynamics of incumbents' sustainable innovation

Given that entire industries face sustainability challenges, it is important to understand the dynamics that lead “firms‐in‐an‐industry” to engage in sustainable product innovation. To provide more insight into the question of how innovation activities spread from individual firm action to an industry‐wide engagement, this paper examines the automobile industry and the development of electric vehicles (EVs). The analysis covers automobile incumbents over a crucial decade for EV development in the industry, focusing on the different strategic motives that especially the so‐called “first movers” used to justify their earlier engagement. We find that EVs became a core pillar of the incumbents' technology strategies through a combination of coercive, normative, and mimetic pressures. Yet, the strategic motives to engage in EVs stayed poles apart between different companies. The insights from our study are relevant for those interested in the diffusion of sustainable product innovation and in incumbent behaviour in sustainability transitions.     

Steven Levitt on Abortion and Crime: Old Economics in New Bottles

This article explores the work of Steven Levitt on abortion and crime as representative of a new wave of economists that are redefining the mainstream of the discipline. Levitt has moved away from formalized modeling of narrow self‐interested maximization that was a hallmark of the “old” mainstream. However, he retains the “old” mainstream linchpins of a focus on the individual by abstracting from the social context, and an emphasis on the ability of econometric testing to reveal the truth. These crucial elements that Levitt retains from the “old” mainstream create some problems of both emphasis and analysis for his explanation for the drop in crime in the United States.     

Total quality management and statistical quality control: practical applications to waste stream management

TQM offers a completely new approach to problem solving in health care. The approach requires dedication and persistence in monitoring, understanding, and changing systems at a level that has never been reached before in the United States' health care system. Materiel management, purchasing, nursing, housekeeping, and administration now have the necessary tools to centrally study the medical waste stream flow at their facilities. The intent of this article is to display how TQM techniques can be applied to minimize a hospital's medical waste stream. The approach of studying medical waste as a defect generated during the process of delivering high-quality care enables a hospital to pinpoint causes of these defects, modify the parent system of the defect, and lessen the generation of medical waste defects. Successful implementation of these techniques as a continuous process will enable hospitals to be leaders in the preservation of their host communities' environments.     

Liquefied Natural Gas: Redefining Nature,Restructuring Geopolitics,Returning to the Periphery?

The liquefied natural gas (LNG) industry began as a means of making use of natural gas resources in socially remote regions and of natural gas associated with oil production. Natural gas was transformed from a waste product into LNG that could be moved thousands of miles to market, redefining “waste” as a valuable raw material. As the newest large-scale LNG exporter, the United States entered the LNG industry based on another redefinition of nature: the extraction of natural gas previously economically and technologically inaccessible in shale formations. Hydraulic fracturing and new drilling technologies have created reserves of natural gas that are driving down prices with excess production and provoking a search for new markets via LNG exports. Liquefied natural gas is reshaping economies, communities, industries, and ecosystems in the United States and in other parts of the world. This article analyzes the role of the LNG industry with a particular focus on the economic and geopolitical consequences for the United States. The United States is returning to its historical role of energy exporter. Some view the return to this role as an economic and geopolitical boon that will enhance the U.S. economy and the nation’s global standing. A contrasting interpretation sees the United States sliding into the extractive periphery, serving the energy demands of a growing China, much like the United States once did for Europe and especially Great Britain. This view condemns what it views as the exploitation of U.S. natural resources to meet China’s energy needs while leaving large areas of the United States with depleted resources, damaged ecosystems, and disrupted communities.