Efficiency in Nursing and Care Services: An analysis of the efficiency levels and the determinants of variation in efficiency in Norwegian municipalities’ provision of nursing and care services

Abstract

Municipalities are responsible for the delivery of nursing and care services to the local population in Norway. Demographic changes, budget constraints and technological advances are among the factors challenging the health care sector to provide more efficient services. Public provision of services are not subject to competitive market control, but efficiency analysis can offer insight on municipal performance and improvement potential. The paper examines the efficiency levels of municipal nursing and care services. The analysis will identify fully efficient municipalities and provide a benchmark for best practice. A second-stage analysis will attempt to explain the observed variation and identify potential correlates of efficiency. A Data envelopment analysis (DEA) will estimate efficiency levels for all municipalities. The estimates will be bootstrapped to generate corrected estimates with confidence intervals. A subsequent analysis will examine the observed variations in efficiency through a regression analysis. The DEA yields improvement potential on all efficiency measures. Corrected estimates derived from bootstrapping procedure yield average efficiency level of 0.65 for input-oriented technical efficiency within 95% confidence interval 0.634-0.661. The analysis also reveals significant variation in efficiency among municipalities. The second stage analysis identified potential determinants of variation in efficiency, attributing variations in efficiency to municipal revenue level, degree of user fee financing as share of operating costs and population size.