Quality-Efficiency Trade-offs in Service Organizations: A SFA-based Approach with Application in Health Care Services

Quality-Efficiency Trade-offs in Service Organizations: A SFA-based Approach with Application in Health Care Services

Authors

Abstract

We propose an augmented Stochastic Frontier Analysis (SFA) model for developing quality adjusted efficiency scores, and hypothesize organizational drivers that contribute to quality-efficiency tradeoff. In so doing, we isolate the disparate impact of organizational scale and process factors on quality-adjusted and –unadjusted efficiency scores. Overall, our findings provide a systematic and actionable approach for aiding managers in navigating quality-efficiency trade-offs