Abstract
This study examines the effect of ring fencing in surgical departments. Ring fencing means to shield a surgery unit from interrupting emergency cases. The analysis is performed on two levels. First, an intensive three-month study at the departmental level of three hospitals was performed. It investigates the relationship between the different units involved in a hospital’s surgical activity and analyzes the specific units’ use of resources and production. Second, a panel data analysis of the organizational population of Norwegian hospitals over the period 1992 to 2000 is conducted, using a “fixed effect” regression model to analyze the effect of ring fencing on a hospital’s total cost- and technical efficiency. The study of the three hospitals indicates that ring fencing could have a positive effect on cost- and technical efficiency under the right conditions of case-mix and high demand for elective surgery. However, the analysis of the hospital population shows no particular effect of ring fencing. The models are unstable and are distorted by the exclusion of one of the hospitals. Ring fencing does not seem to have a significant effect on a hospital’s general cost-efficiency, but it could have local effects as indicated through the case analysis of three hospitals. Under careful consideration of hospital resources, competencies, case-mix and service demand, ring