Efficiency indicators versus frontier methods: an empirical investigation of italian public hospitals

E±ciency has a key-role in the measurement of the impact of the National Health Service (NHS) reforms. We investigate the issue of in- e±ciency in health sector and provide empirical evidence derived from Italian public hospitals. Despite the importance of e±ciency measure- ment in health care services, only recently advanced econometric meth- ods have been applied to hospital data. We provide a synoptic survey of few empirical analyses of e±ciency measurement in health care ser- vices. An estimate of the cost e±ciency level in Italian public hospitals of the cost e±ciency during 2001-2003 is obtained through a sample. We propose an e±ciency indicator and provide cost frontiers for such hospitals, using data envelopment analysis (DEA) and stochastic fron- tier analysis (SFA). Moreover, we examine the posited determinants of health care e±ciency in a two-stage estimation framework.