Swedish county council's efficiency in production of specialized somatic care

Sammanfattning: Data Envelopment Analysis (DEA) which compares different Decision Making Units (DMUs) has been used by some scholars to find the most efficient hospitals within Sweden or within Nordic countries. In Sweden, healthcare is decentralized and provided mostly by the 21 county councils. Even private providers have to sign contracts with the county councils in order to be permitted to operate within their geographical areas. County councils are the responsible authorities for the hospitals. For that reason, this master’s thesis in economics has county councils rather than individual hospitals as DMUs for comparing specialized somatic care provision. One county council, Gotland, is excluded from the comparison as it differs from the others by being both county and municipality council. Even the data for Gotland has been inadequate, so the models used in this paper are based on 20 county councils. DEA can either be output-oriented in which the goal is to maximize output levels given certain levels of inputs or input-oriented in which outputs are treated as fixed and the goal is to minimize the inputs. In this thesis, the later type is used as the output variables are treated as mostly uncontrollable given the fact that county councils are obliged to provide care for the inhabitants and most admissions are unplanned. 4 monetary-based input variables and 2 production-based output variables are used. 6 years; 2006, 2008, 2010, 2012, 2014 and 2015 are used in order to assess the robustness of the technique. The results show that there are scale effects in place as the bigger county councils, especially those with university hospitals, perform better than the smaller ones in terms of resource efficiency. The efficiency frontier also demonstrates a tendency for presence of variable returns to scale for the input variables capturing expenditures related to provision of specialized somatic care.