Evaluating health care efficiency.

In this chapter we propose a three-pronged approach to assessing efficiency of health care, including financial performance, performance in the production of (intermediate) medical outcomes and performance relating medical outcomes to patient health outcomes. Throughout we use frontier models which can be estimated in a number of ways, including DEA, stochastic frontiers and index numbers. We illustrate the health outcomes model with an application to cataract surgery patients in Sweden and use DEA as our estimator. Again, other frontier estimation methods as well as index numbers could be employed to explore other procedures' effectiveness and overall performance of services and/or hospitals and clinics.