| Government cost containment policies, in particular, fixed price reimbursement, has substantial influence on the nature of market structure of the dialysis industry and the ways dialysis facilities respond to those policies as well as the facility performance. The purpose of this dissertation was to identify market and facility characteristics associated with technical efficiency in the production of renal dialysis. From a perspective of the industrial organization theory, a conceptual model was developed for analyzing technical efficiency by the degree of market competition and a set of facility characteristics reflecting differential behavior in achieving efficiency across dialysis facilities.; Using Health Care Financing Administration Data and Area Resources File data, analyses were performed on a sample of 791 Medicare-certified freestanding dialysis facilities. An optimization-based technique, namely, data envelopment analysis was utilized to examine relative technical efficiency in order to create the binary dependent variable of technical efficiency status. Multivariate logistic regression analysis was used to regress technical efficiency status against its predictors as well as other control factors.; Multivariate logistics regression analyses demonstrated that affiliation with the large-sized dialysis chains was significantly and negatively associated with technical efficiency, compared to independent status. Also, compared to for-profit ownership, nonprofit ownership was significantly and negatively associated with technical efficiency. Positively associated was the interaction term between nonprofit ownership and market share of for-profit facilities. The intensity of competition, the interaction term between competition and ownership type, and a policy of dialyzer reuse were not significantly associated with technical efficiency.; These findings suggest that under the current payment policy efficient production of dialysis outputs vary by ownership type, a strategy of system affiliation, and the degree of dominant power represented by for-profit facilities in local markets. Given an ongoing search for alternative reimbursement mechanisms by the federal government, renewed interest in the performance of technical efficiency and its potential determinants in dialysis production is likely to take place. |
