Exploring the Spatial Interdependence in Efficiency of Private Hospitals in Pakistan

Abstract

A major health policy concern is the presence of inefficiencies in health care provision. This study estimates the technical efficiency for ambulatory services and inpatients care in private sector hospitals in Pakistan. Efficiency scores for the sample hospitals, estimated using Stochastic Frontier Analysis, are aggregated at the regional (district) level to identify the existence of spatial interdependence. The results from the spatial analysis suggest that efficiency has a positive spillover for outpatient care in small hospitals. Big hospitals, however, show inconsistent results. We concluded that small hospitals compete in outpatients with the motive of profit maximization.