Premium
An econometric study of costs of teaching and research in Finnish hospitals
Author(s) -
Linna Miika,
Häkkinen Unto,
Linnakko Eero
Publication year - 1998
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/(sici)1099-1050(199806)7:4<291::aid-hec343>3.0.co;2-4
Subject(s) - reimbursement , marginal cost , economics , frontier , econometric model , actuarial science , operations management , econometrics , health care , economic growth , microeconomics , geography , archaeology
In this study we used stochastic frontier cost functions to estimate the teaching and research costs of Finnish hospitals. Average and marginal cost estimates were used to evaluate the current reimbursement system as well as to calculate the total expenditure on teaching and research in hospitals. The efficiency adjustment had significant impact on the marginal and average cost estimates of the teaching and research output. The main policy implication of this study is that university teaching hospitals are able to produce both teaching and research output at significantly lower marginal and average incremental costs than other hospitals. According to our results 55% of the total state reimbursement budget for teaching and research (FIM 665 million) should be allocated to teaching and 45% to research. © 1998 John Wiley & Sons, Ltd.