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Hospital performance in a noncompetitive environment

In this article, we perform a quantitative analysis of the performance of hospital services in a nonmarket environment based on a very complete data set. Evaluating efficiency in a nonmarket system is important since the absence of market mechanisms could yield large inefficiencies. In fact, we show that hospital performance varies greatly across institutions. Specifically, our results suggest that hospitals with high levels of quasi-fixed factors are less efficient than other institutions. In general, hospitals performed very differently even after controlling for differences in services, hospital and patient characteristics. All in all, increased efficiencies could lead to potential savings, for the Québec government, in the hundreds of millions of dollars.