Efficiency of hospitals in the Czech Republic: Conditional efficiency approach

The paper estimates cost efficiency of 81 general hospitals in the Czech Republic during 2006-2010. We employ the conditional order-m approach which is a nonparametric method for efficiency computation accounting for environmental variables. Effects of environmental variables are assessed using the non-parametric significance test and partial regression plots. We find not-for-profit ownership and a presence of a specialized center in a hospital to be detrimental to hospital performance in the group of small and medium hospitals, while not-for-pro t ownership is favorable to efficiency for big hospitals. Generally, hospital performance gets worse in period 2009-2010 because additional revenues received in form of user charges which were introduced in 2008 increase spending of hospitals. Only big hospitals proved to take some cost-saving measures as a reaction to financial crisis.