Efficiency and administrative costs in primary care

A Giuffrida, H Gravelle, M Sutton

Research output: Contribution to journalArticlepeer-review

Abstract

We use a formal model to examine the implications of endogenous managerial effort for the interpretation and estimation of efficiency in health care organisations. The model is applied to investigate the doubling of the cost of administering primary care in England in real terms between 1989/1990 and 1994/1995. The main cost determinant was the number of general practitioners (GPs), and there were economies of scale but not of scope. Fundholding had a positive but small effect on administrative costs, so that the recent abolition of fundholding may do little to reduce primary care administrative costs. After allowing for changes in the numbers of primary care practitioners, the quality of primary care and the extent of fundholding, most of the increase in costs was unexplained, and may reflect additional but unmeasured increases in the administrative burden associated with the 1990 reforms. There was little variation in relative efficiency across areas. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification: I18; I11; L31.

Original languageEnglish
Pages (from-to)983-1006
Number of pages24
JournalJournal of health economics
Volume19
Issue number6
Publication statusPublished - Nov 2000

Keywords

  • primary care
  • administrative costs
  • efficiency measurement
  • performance indicators
  • cost function
  • STOCHASTIC FRONTIER
  • ECONOMIES
  • SCALE

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