Transfer pricing in hospitals and efficiency of physicians: the case of anesthesia services.

The objective is to investigate theoretically and empirically how the efficiency of the physicians involved in anesthesia and surgery can be optimized by the introduction of transfer pricing for anesthesia services. The anesthesiology data of approximately 57,000 operations carried out at the University Hospital Hamburg-Eppendorf (UKE) in Germany in the period from 2000 to 2002 are analyzed using parametric and non-parametric methods. The principal finding of the empirical analysis is that the efficiency of the physicians involved in anesthesia and surgery at the UKE improved after the introduction of transfer pricing.