Measuring the Relative Performance of Providers of a Health Service

Abstract

Abstract: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, 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. *

Benchmarking for Productivity Improvement: A Health‐care Application*

“…Our results also relate to the health services literature on the effectiveness of substance abuse treatment, as discussed in a prior version of this article (Ackerberg et al, 2001).…”

“…For example, a regulator overseeing publicly funded drug treatment providers might measure (and reward) the best performers using our methodology. 4 Our results also relate to the health services literature on the effectiveness of substance abuse treatment, as discussed in a prior version of this article (Ackerberg et al, 2001). production function literature by estimating the health improvement that results from time in treatment (which can be interpreted as an input) while controlling for patient characteristics, and to the treatment effects literature by comparing the effects of different treatments on the production of health. In contrast to the usual static production function approach, however, we model more explicitly the dynamics of health-care improvement.…”

“…Our estimated model contains a large number of coefficients in addition to the estimated treatment and population effects discussed in the text. For a more detailed discussion of these coefficient estimates see Ackerberg et al (2001). 66 It is clear that we cannot reject the null of equal means across categories for size.…”

“…67 There is a large literature on the effectiveness of substance abuse treatment. The Appendix of the prior version of this article (Ackerberg et al, 2001) contains a brief discussion of how our approach and results relate to that literature. The estimates of the frequency of use model are presented in Table A.1.…”

Provider–client interactions and quantity of health care use

“…We regard quantity as the provider's limit if and only if a provider says that a client has completed treatment. Because of the abundant information in the data set, MATS has been used by Lu and McGuire (2002), Machado (2001), and Ackerberg et al (2001) for the study of treatment productivity, and by Shen (1999) for the study of strategic risk selection by providers.…”