Persistent and Transient Inefficiency of Australian States and Territories in Providing Public Hospital Services: An Application of Bayesian Stochastic Finite Mixture Frontier Analysis

Current literature on public hospital efficiency in Australia only reveals information how efficient hospitals are the short run. The presence of persistent technical inefficiency arising from long-term systemic problems and government-related regulatory constraints does not appear to have been addressed. Using aggregated panel data for period 2002–2018 eight Australian states territories, this study incorporates measure both transient while controlling unobserved heterogeneity obtain a more precise efficiency. This study’s findings estimate national average be 0.96. In contrast, is estimated 0.83. Further, Queensland (0.67), Victoria (0.66) New South Wales (0.60) posted lowest overall driven by high level inefficiency. On other hand, Northern Territory (0.96), Capital (0.95) Tasmania top performers. call policy-makers regulators disclose hospital-level researchers gain further insight into causes persistence inefficiency, especially among bigger states, which will help formulate targeted policy interventions.