Measuring efficiency in health care: an application to out of hours primary care services in the island of Ireland

This paper is a cross border study that explores isolating the efficiency component and measuring its overall contribution to productivity in the case of out of hours (OOH) primary care services operating on the Island of Ireland. Out of hours GP care is supplied throughout the Island of Ireland by OOH co-operatives. Although Northern Ireland (NI) and the Republic of Ireland (ROI) have their own individual health systems the OOH organisations themselves are relatively homogenous in structure. The data for this study has been gathered and collated by the author and relates to six of twelve co-operatives operating in ROI and five of the seven co-operatives in NI. The primary aim of this paper is to estimate efficiency for these organisations using stochastic frontier analysis (SFA) SFA was chosen as the method for analysis as it allows distinction between ‘noise’ effects and efficiency effects. This paper outlines the means that SFA methodology can be used to derive sensible and robust efficiency estimates for OOH primary care organizations operating on the Island of Ireland. The paper also examines the sensitivity of these estimates to the choice of functional form for the health production function, the choice of error distribution for the efficiency terms and the means in which heterogeneity is incorporated into the analysis. Individual efficiency estimates, rankings, cross border rankings and comparisons are reported to allow recommendations to be made on how these organizations can improve their production process.