Does Competition Increase Economic Efficiency in Swedish County Councils?

Turning to the demographic and case mix variables, the parameter estimate for population
density is negative and statistically significant at the 5 percent level contrary to our
expectations. The parameter estimate relating to the proportion of the population over the age
of 75 is, however, negative and statistically significant at the 10 percent level, as expected.

Finally, we would like to suggest some directions for future research. In this paper, we have
shown that there is a positive and statistically significant correlation between the proportion of
health care being produced by others that the local county councils and economic efficiency.
However, the available data did not make it possible to directly determine the causal
relationship between the amount of alternative health care and economic efficiency. Instead
there are (at least) four different ways that an increase in the amount of health care being
produced by others than the local county council could affect economic efficiency. In order
discriminate between the different possible causal pathways, one should collect disaggregated
data so that alternative and county council production units could be compared directly in
terms of economic efficiency, controlling for as many confounders as possible. If such data
could be made available, measuring inputs- and outputs on the individual health centre level,
one could also investigate if the salaries of different categories of personnel was equal to the
value of their marginal product, or if some categories were being discriminated against.
Another improvement would of course be if one could directly measure quality adjusted
health outcomes in different county councils, and use these as measures of output instead of
indirect measures as the ones used in this paper. We are, however, not aware of any of the
above mentioned datasets being available for research in Sweden at present.

Acknowledgements

The authors would like to thank seminar participants at the University of Gavle and the
County Council of Gavleborg for helpful comments and suggestions.

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