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BENCHMARKING FOR PRODUCTIVITY IMPROVEMENT: A HEALTH‐CARE APPLICATION*
Author(s) -
Ackerberg Daniel A.,
Machado Matilde P.,
Riordan Michael H.
Publication year - 2006
Publication title -
international economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.658
H-Index - 86
eISSN - 1468-2354
pISSN - 0020-6598
DOI - 10.1111/j.1468-2354.2006.00376.x
Subject(s) - benchmarking , productivity , agency (philosophy) , unobservable , attrition , best practice , benchmark (surveying) , health care , average treatment effect , duration (music) , operations management , treatment effect , actuarial science , medicine , population , process (computing) , business , propensity score matching , economics , econometrics , computer science , marketing , environmental health , economic growth , surgery , art , philosophy , dentistry , traditional medicine , literature , management , geodesy , epistemology , geography , operating system
A methodology is developed and applied to compare the performance of publicly funded agencies providing treatment for alcohol abuse in Maine. The methodology estimates a Wiener process that determines the duration of completed treatments, while allowing for agency differences in the effectiveness of treatment, costs of treatment, standards for completion of treatment, patient attrition, and the characteristics of patient populations. Notably, the Wiener process model separately identifies agency fixed effects that describe differences in the effectiveness of treatment (“treatment effects”), and effects that describe differences in the unobservable characteristics of patients (“population effects”). The estimated model enables hypothetical comparisons of how different agencies would treat the same populations. The policy experiment of transferring the treatment practices of more cost‐effective agencies suggests that Maine could have significantly reduced treatment costs without compromising health outcomes by identifying and transferring best practices.